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AGENDA
Council Finance & Audit Committee
August 19, 2019
10:00 am - noon
CIC Room - City Hall
Approval of Minutes from the July 15, 2019 Council Finance Committee meeting.
1. 2018 Fund Balance Review 20 minutes T. Storin
2. 2020 Budget Revision Review 30 minutes L. Pollack
3. Comprehensive 2019 Fee Updates 20 minutes J. Poznanovic
4. Potential New Revenue Discussion 10 minutes M. Beckstead
5. Epic Program – Long Term Financing 20 minutes T. Storin
Council Finance Committee
Agenda Planning Calendar 2019
RVSD 08/09/19 ck
Aug 19P
th
P
2018 Fund Balance Review 20 min T. Storin
2020 Budget Revision Review 30 min L. Pollack
Comprehensive 2019 Fee Updates 20 min J. Poznanovic
Potential New Revenue Discussion 10 min M. Beckstead
Epic Program – Long Term Financing 20 min T. Storin
Sep 16P
th
P
2019 Annual Adjustment Ordinance 15 min L. Pollack
Financial Policy Review & Updates 20 min J. Voss
Development Review Fee Update 30 min T. Leeson
N. Currell
Oct 21P
st
P
Nov. 18P
th
P
City Long Term Financial Plan Review 30 min D. Lenz
Dec. 16P
th
P
Utility LTFP & CIP 30 min L. Smith
Future Council Finance Committee Topics:
• Park/Median Design Standards & Maintenance Costs - TBD
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Meeting Minutes
07/15/19
10 am - noon
CIC Room - City Hall
Council Attendees: Mayor Wade Troxell, Ross Cunniff, Ken Summers
Staff: Darin Atteberry, Kelly DiMartino, Mike Beckstead, Travis Storin, Kelley Vodden, Jennifer
Selenske, Kerri Ishmeal, Renee Callas, John Voss, Mark McKinney, Terra Sampson, Sean
Carpenter, Tyler Marr, Dean Klingner, Victoria Shaw, Josh Birks, John Duval, Tyler Marr,
Jo Cech, Katie Ricketts, Zach Mozer, Mike Calhoon, Bob Adams, Marc Rademacher,
Carolyn Koontz
Others: Chris Telli, BKD LLP, Anna Thigpen, BKD LLP
Kevin Jones, Chamber of Commerce
Dale Adamy, RIST.org
Northfield Metro District; Jason Sherril, CEO, Landmark Homes, Chris Beabout,
Development Manager, Landmark Homes and Robert Rodgers, Shareholder, White Bear
Ankele Tanaka & Waldron (Attorney for Developer)
______________________________________________________________________________
Meeting called to order at 10:06 am
Approval of Minutes from the June 17, 2019 Council Finance Committee Meeting. Ross Cunniff moved for approval
of the minutes as presented. Ken Summers seconded the motion. Minutes were approved unanimously.
A. 2018 Audit Results
Travis Storin, Accounting Director
Chris Telli, BKD LLP
Anna Thigpen, BKD LLP
SUBJECT FOR DISCUSSION
Independent Auditors’ Report on 2018 Financial Statements
Independent Auditors’ Report on Compliance for Major Federal Programs
EXECUTIVE SUMMARY
BKD will be presenting the Report to the City Council. This report covers the audit of the basic financial
statements and compliance of the City of Fort Collins for year-end December 31, 2018.
2
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Staff seeks input on areas of priority or concern, other than those established in this Report to the City Council,
for matters of recordkeeping and/or the City’s internal control environment.
Otherwise there are no specific questions to be answered as this is a 2018 year-end report.
BACKGROUND/DISCUSSION
In compliance with Government Auditing Standards, the City undergoes an independent external audit on an
annual basis. BKD finalized its financial statement audit and compliance report on June 21, 2019 and the firm is
required to report the results of the audit to those charged with governance.
Attachment 1 to this agenda item contains the full report, and findings of note are summarized below:
Significant Deficiency (Attachment 2, page 13):
There was one significant deficiency identified related to Federal grants in the Compliance Report, finding 2018-
001 which reads in part (emphasis added):
The City originally passed an ordinance in 2005 allocating 0.25% tax for the construction of capital assets in the
Community Capital Improvement Program Fund (CCIP), a special revenue fund. The tax was later extended by
Ordinance No. 013-2015 commencing January 1, 2016 and expiring December 31, 2025. When the initiative was
extended, the City created a separate fund for the proceeds until which time the proceeds were expended for
the approved capital projects. When the approved projects were completed, the taxes were transferred from
the CCIP Fund to a capital projects fund. During the year-end financial reporting process, when the City
identified capital asset-related expenditures for capitalization, it inadvertently capitalized the same cost twice;
once when the expenditure was initially recorded in the CCIP Fund and a second time when those same costs
were transferred to the capital projects fund.
The finding results in an adjustment to reduce the City’s $1.6 billion of capital asset balances by approximately
$11.7 million, of which $8.4 million relates to prior periods. The City adjusted the 2018 financial statements and
issued a corrective action plan to prevent this condition in future years (Attachment 3).
Significant Issues Discussed with Management (Attachment 1, page 4):
City management and the audit team discussed the accounting treatment of a 2013 plant investment fee
agreement with Fort Collins-Loveland Water District after receipt of pre-payment from the District in 2019.
Ultimately, the original 2013 treatment will be applied to this agreement.
Other Findings (Attachment 1, pages 6-7):
Other findings/deficiencies identified by the auditors but not rising to the level of a significant deficiency can be
found in the Report to the City Council (Attachment 1, pages 6-7). Staff will provide a written response to the
audit findings at a fourth quarter Council Finance Committee meeting.
DISCUSSION / NEXT STEPS:
CAFR and compliance with federal programs for grant funds we receive
One Level 2 Control Finding - our first Level 2 finding since 2012
One finding from the IT realm
Single Audit Report; Financial and Compliance (Federal Grant Funding) audit within one audit
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Page 4: Total Expenditure of Federal Awards is $15.3M (this amount just Federal Grants) - subject to
audit - not all of which were audited –
Page 11: Summary - clean opinion - Schedule of Findings
2 report on internal control - unmodified opinion on audit
1 significant finding - non-compliance as it relates to federal awards
No material weaknesses identified
Two programs will rotate for audit – program determination is skewed toward big dollar projects
2 programs selected; Federal Transit Program and the Equitable Sharing Program – transfer of money to Larimer
County - City is identified as a low risk auditee which impacts the number of major programs required to be
audited.
Page 13: Finding required to be reported by GASB
Significant deficiency finding - Accounting for Capital Assets - During the year end reporting process there were
some capitalized assets that were capitalized twice, they were recorded once in the CCIP fund and again when
they were transferred out to the Capital Projects fund. Double reporting itself resulted in an $11.7M adjustment
And a $8.4M amount related to prior periods - not recorded in financial statements this year - considered a past
adjustment. Not material or misleading to Financial Statements.
Corrective Action - City officials are required to provide a response to the finding. Travis has prepared a
separate response addressing what the Accounting Department will do to address this finding.
Travis Storin; any time we get a significant deficiency we treat it quite seriously – this occurred in 2016 when
CCIP tax rate was renewed. Data mining tools identify what are the population of costs that should be
depreciated. Those queries were tuned to pull in the transfer activity – capitalized blue dollars out of CCIP and
into fund – fund were capitalized again when dollars were spent – no impact on fund balance - happens at the
full accrual level of accounting so no impact on reserves, BFO or Strategic Planning. This happens at the
atmospheric level of the financial statements. This does not factor into credit agency reporting or the
underwriting community. In terms of impact, this will drive increased testing in next year’s audit. The fix itself
is a virtual toggle in how the data mining tools are set up. Fairly easy to fix but is a large dollar amount $11.7 M
out of our $1.6B of infrastructure assets.
Ross Cunniff; how do we calculate depreciation on these assets?
Travis Storin; this amount is net of anything we depreciated over the last 3 years. Correct the two years that the
system assumed these assets were in service. back up and restate
ACTION ITEM:
Ross Cunniff; are there any other required notifications that we should make?
Travis Storin; We do have continuing disclosure requirements under the Security Exchange Act of 1934. I will
confirm this with our external advisor, James Manire but I don’t believe this is qualifies as a disclosure event
under the 1934 Act.
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Ross Cunniff; the other low impact finding; Critical facilities within 5 miles of each other.
Do we have a plan to analyze that? What implications that would have for our internet utility?
Mark McKinney; Data Centers are about 5 miles apart - We have seen this as a potential risk for some time.
With Connexion coming on-line we are looking at Inter-Agency agreements with possibly Loveland or Cheyenne
down the road, to get more connectivity and share facilities between the two of us.
3P
rd
P option is a distributed data center. We currently have 2 main data centers. The one in City Hall is very aged -
not quite meeting the requirements for a 5-10-year goal. Even with consolidation we are running into problems
with power and cooling issues down the road. A possibility of a distributed environment where we put a
portion of data center in city facilities all around reducing the environmental load - not having to have a data
center with extreme power and cooling capability but having a N+1 for data centers where we could have this
building house 1/5 of our data which then repeats that data to multiple other locations within the city.
Mike Beckstead; we are in the exploration mode; What is the gap? How significant is it?
We will be coming back in Q4 for direction and specific implications to address these findings and how we best
address these issues. Will come back with specificity on how we best address these issues.
Page 6: Deficiencies
IT best practices – BKD’s IT audit team was brought in to perform this work. 4 recommendations
Financial Reporting – overall theme is reconciliations and having supporting documentation to support
balances. None of these issues materially affected the financial statements.
Other Matters Section - Upcoming pronouncements that will or may impact the city;
GASB 83 Asset Retirement Obligations
Review statements for potential valuation
GASB 84 Fiduciary responsibilities with Pension Plans - change in reporting requirements
Changes definition of agency funds and other components
GASB 87 This will essentially change the way that capital leases are reported - effective 2020 - removes
the operating lease component - will only be capital leases - biggest key challenge will be
Identifying potential leases and if they are material - how they are recorded in the financial
statements
GASB 88 Certain disclosures related to debt - definition - not a big change - just additional disclosures
Ken Summers; reconciliation issues - what is the recommendation related to those? go back 20 years – what is
the plan and approach to deal with unreconciled accounts?
Mike Beckstead; we have been focused over the last 2-3 years on major account reconciliations and that has
been consuming the bandwidth of the team. Those accounts are now reconciled and are behind us. Now the
effort moves into this 2P
nd
P tier which includes smaller accounts that is very much in the workflow and the focus
for 2019-20.
5
Travis Storin; these are not cash accounts but are upstream from JDE - managing developer escrows to funds –
there is no interface built into the system, so the balancing activity is a manual activity (similar to balancing
checkbook)
Mike Beckstead; we will get a process defined and a cadence to that process put in place and the team will be
focused on this effort in 2019 – 20.
Chris Tilley; our recommendation is exactly as Mike Beckstead stated (analyze, clean up, reconciliation, no
impact)
Ross Cunniff; you mentioned that some smaller federal grants might never be audited - risk to city is much lower
but randomly picking one of them every year for auditing might be something to consider.
Chris Telli; we can look into doing that – they would never be required due to $750K threshold.
Programs that never reach that threshold typically don’t get to the point of requiring an audit.
ATION ITEM
Ross Cunniff; Do any of your other clients have whistle blower programs?
Chris Tilly; many clients have a fraud hotline in place which we highly recommend - it should be available to all
employees and to the community at large. There are many other vendors that offer this service in addition to
BKD.
Kelly DiMartino; we have an Ethics Hotline available to employees and citizens. It is promoted on our website.
Ross Cunniff; what about policies against retaliation?
Darin Atteberry; we have internal administrative policies around retaliation
ACTION ITEM:
Ross Cunniff; I would recommend we take this to Council as a Resolution given that we have a significant finding.
Mike Beckstead; we will get that scheduled and bring it forward to Council.
Kudos to BKD and to the Staff for a great working relationship.
B. Epic External Borrowing Terms / Details
Sean Carpenter, Lead Specialist, Economic Sustainability
Travis Storin, Director, Accounting
SUBJECT FOR DISCUSSION: Epic Homes Capital Plan - Update & Next Steps
EXECUTIVE SUMMARY
This item will provide an update to Council Finance regarding the Epic Homes capital plan and next steps for
capital agreements. Updates include:
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• Review of on-bill financing history and capital recruitment process;
• Future capital stack;
• Loan terms and rates;
• Cash flow projections; and
• Next steps regarding securing and appropriation of third-party capital into a revolving loan fund.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• Does the Council Finance Committee approve the presentation of financial / loan agreements to the full City
Council for consideration in August?
BACKGROUND/DISCUSSION
Fort Collins’ innovative On-Bill Finance (OBF) program supports a number of community and City Council
priorities, including ambitious goals around energy efficiency and renewables, reduced greenhouse gas
emissions and increased equity and wellbeing of all residents (see 32TUEnergy PolicyU32T and 32TClimate Action Plan32T).
Meeting these objectives will require, among other activities, that greater numbers of property owners
undertake comprehensive efficiency improvements in the coming years, particularly for older, less-efficient
rental properties which make up a large percentage of the City’s housing stock. An ongoing and attractive
financing structure to support energy efficiency retrofits will be a critical element for success moving forward.
On-Bill Financing History
The Home Efficiency Loan Program (HELP, aka OBF 1.0) operated successfully from January 2013 through early
2017 when the maximum outstanding loan balance of $1.6M was reached. In 2017, Elevations Credit Union was
selected through an RFP process for energy loan financing. Utilities staff qualify the efficiency project based on
the rebate measures in the Efficiency Works Home program; however, the loan origination and servicing are
independent of Utilities programs. With the implementation of Epic Loans, Elevations loans will continue to be
an option for interested customers.
Epic Loans (aka OBF 3.0) were revitalized in August 2018 during the Champions Phase of the Bloomberg Mayors
Challenge. The $100,000 award from the Champions Phase and a $200,000 grant from the Colorado Energy
Office were used to kick off the revitalized on-bill financing. Fort Collins is among nine winning cities for the
Mayor Challenge, each receiving $1 M to implement their winning idea. The grant agreement with Bloomberg
Philanthropies was completed in February 2019 and the initial $100,00 tranche of the $1M was awarded. As of
March 2019, Epic Loans has serviced over 20 on-bill loans for $280,000 to support energy efficiency retrofits that
would not have occurred without an attractive financing option.
Leveraging external capital is critical to achieving the long-term vision of Epic Loans and offers a continuing
source of funds to meet increasing customer demand for energy efficiency financing. Epic Loans is designed to
balance the programmatic objectives and financial requirements of the City, while also meeting the needs and
expectations of capital providers and Utilities customers. The program team seeks to design an “evergreen”
revolving loan fund which:
• Supports residential energy efficiency upgrades for years to come;
• Scales to meet long-term efficiency objectives;
• Removes financial barriers to efficiency upgrades with attractive rates and terms;
• Aligns capital commitments with customer loan terms; and
• Minimizes the City and Utilities risk and administrative effort.
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Council Finance Meetings Review
The Epic Homes team presented to Council Finance in November 2018 regarding the program background and
issuing an RFP for third-party capital sources. The City issued RFP #8842 in December 2018 and the team
pursued conversations and negotiations with respondents and other potential capital providers.
The Epic Homes team presented to Council Finance again in May 2019 regarding the potential capital sources
and next steps for bringing capital agreements to Council. Staff have continued negotiations with potential
capital providers (including a locally managed national bank, a regional bank, Coalition for Green Capital, and the
Colorado Energy Office) and received Legal and Purchasing review of draft contracts.
Capital Stack and Terms
Capital sources for the Epic Loan need to align with the following high-level objectives:
• Attractive: The loan program must be able to provide attractive loan terms to customers, specifically
attractive interest rates.
• Scalable: The program must be scalable in support of Fort Collins ambitious energy goals. It is
anticipated that Fort Collins will upgrade thousands of homes in the coming years.
• Parity: In both length and rate, borrowed capital should match loaned capital as closely as possible.
• Simple: The implementation and administration of the program must be as simple as possible for all
parties, including customers, Utilities, and the capital partners.
Capital Stack
To provide sufficient financing for the expected number of projects, the short-term (3-4 year) capital goal is $7M
to $8M. This assumes $1.5M to $2M annually in energy efficiency project financing. The longer-term capital goal
is up to $16M in order to establish a self-sustaining revolving loan. To meet the short-term capital goal, the Epic
Homes team proposes the capital stack below.
Capital Type Provider Term Rate Amount Status
Low or No Cost
Bloomberg Philanthropies –
Champions Phase Award
N/A 0% $100,000 Appropriated July
2018
Bloomberg Philanthropies – Award
Initial Tranche
N/A 0% $100,000 Appropriated
March 2019
Bloomberg Philanthropies – Award
Second Tranche
N/A 0% $488,350 To be appropriated
August 20
Colorado Energy Office –Grant N/A 0% $200,000 Appropriated
August 2018
Colorado Energy Office – Loan 15 year 1-2% $1,000,000 To be appropriated
August 20
External Market
National Commercial Bank 5 & 10
year
3.95% -
4.25%
$2,500,000 To be appropriated
August 20
Regional Private Bank (through
National Green Bank)
15 year 5.75% $2,500,000 To be appropriated
August 20
Internal
Repayments of previously paid
loans
N/A 0% $374,000 Appropriated as
part of revolving
loan fund in OBF
1.0
Total $7,262,350
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Flexible structures which minimize the need for the City to carry non-deployed debt capital, such as lines of
credit versus term loans, are being pursued with the capital providers. In all cases, Fort Collins Utilities would be
the borrower, with the third-party funds being loaned to customers by Utilities. Fort Collins Utilities would be
responsible for the repayment to the capital provider. In turn, Utilities customers carry the obligation for
repayment of loans to the City via their utility bill. Utilities has various code-specified tools for recourse of
delinquent utility bills that makes the risk profile for the Epic Loan portfolio extremely low. Third-party capital
providers will have a senior pledge on customer loan repayments and second position on Electric Utility
revenues, after the more senior pledge held by revenue bondholders. Finally, the City may pre-pay any of these
agreements in whole or in part at any time and without penalty.
Capital Source #1: Colorado Energy Office
• Amount: Up to $1,000,000
• Length: 15-years inclusive of draw period
• Draw period: None
• Fixed Rate: 1.25% to 2.25%
External Capital Source #2: National Commercial Bank
• Amount: Up to $2,500,000
• Length: 5-year and 10-year portions, inclusive of draw period
• Draw period: Up to 2 years with monthly draws based on customer loans
• Variable Rate Period: Fed SOFR plus X% (applies during draw period)
• Fixed Rate: 5-year or 10-year Treasury Note plus X% (rate becomes fixed after draw period)
External Capital Source #3: National Green Bank
• Amount: Up to $2,500,000
• Length: 15-years inclusive of draw period
• Draw period: Up to 2 years with quarterly draws based on customer loans
• Variable Rate: Wall Street Journal Prime + 0.25% (currently 5.75%)
• Collateral: City will deposit 50% of drawn amount into FDIC-insured account
Policy Exceptions
Source #2 and #3 each have terms that interact or conflict with Financial Policy #7.
Debt Instrument Policy Issue
Source #1: State Energy Office • None
Source #2: 5- and 10-year National
Commercial Bank
• Variable rate for 2 years, managed in 6-
month intervals
Source #3: 15-year National Green Bank • Credit Enhancement, and
• Variable Rate, or
• Derivative Swap instrument
For source #2 (5- and 10-year commercial funds), staff has arranged for rate-lock rights during the 2-year
variable draw window which effectively stabilizes the debt service per policy.
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For source #3 (15-year green bank funds), staff assesses an appropriate use of a credit enhancement via the
collateral pledge.
The note is written with variable rate for its duration, however. Staff has attempted to negotiate rate lock-in
rights during the draw period, but the lender has been unable to flex. Alternatives are to accept the terms of this
deal, terminate the deal, or manage the variable rate risk via an interest rate swap. The swap would qualify as a
derivative instrument, which is also covered by policy as an instrument the City should avoid.
Retail Rates and Terms
In December 2018, the financial officer’s rules and regulations were revised to remove language about specific
interest rates and allows for regular review and necessary adjustments of interest rates based on third-party
capital terms, and approval of the City CFO. The City will blend capital sources and interest rates into loan
offerings that recover the cost of capital and include a modest administrative premium to cover administrative
costs in the future. The current loan interest rates interest rates based on capital sources are as follows:
Loan Term Interest Rate (Effective
Jan. 2019)
Interest Rate (Effective
Jul 2019)
3 or 5 years 3.49% 3.75%
7 or 10 years 3.99% 4.25%
15 years 4.49% 4.75%
Next Steps
The Epic Homes team is finalizing lending agreements with third-party capital providers. The Epic Homes team
seeks approval from Council Finance to proceed with City Council consideration of financial agreements during
the August 20 Council session. A separate ordinance will be prepared for each capital provider.
NEXT STEPS / DISCUSSION:
Mike Beckstead; policy consideration - some I would consider to be in a bit of a gray zone - we want to be clear -
we will be coming back to clarify consistency in terms with our current debit policy. Variable rates, slots.
There is one that is are looking for a 50% deposit of what we borrow as a credit enhancer which is a stretch to
our current policy and needs to be discussed. We pushed back hard, and they came back and said it is a
requirement to do this loan.
Sean Carpenter; we have heard consistently that trying to borrow money beyond 10 years will be difficult -
finding 15 year money has been a real challenge but it is important programmatically especially in the
Bloomberg project where we are targeting rental properties - HVACS - owners need that longer term to keep
payments lower.
Travis Storin; there are several interactions with policy and one outright exception - we will be very transparent
and upfront about any proposed policy exceptions when this is brought forward.
L&P reserves would fund it and would be restricted for the life of the contract and would become reserves we
can’t appropriate.
Variable Rate Debt – discouraged by not prohibited by policy - if we feel it is warranted.
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15 year money variable rate for life offered - we can terminate the deal if we needed to or modify our program
or product offerings to Epic loan customers or we can try to manage that risk with another instrument - variable
interest rate swap which is a derivative financial instrument and is to be avoided per policy - approach a
separate bank - the financial industry calls it a plain vanilla swap - fixed for variable rate trade. Low risk and
widely available.
Mike Beckstead; challenge to me is borrowing 15-year money at a variable rate and loaning it out at a fixed rate
is a bit of a non-starter from my perspective - that is where the swap came from – has some challenges but
might be better than doing nothing.
Ross Cunniff; access to larger pool of money - moves some of the risk to the lender - use our capital as collateral
3 different policy excursions from this same source - to get us a 15-year product it will cost us half of that total -
we could do 15-year terms but we would assume the risk
Mike Beckstead; we have the Council approved $1.6M of L&P reserves and of that amount $400K is still
available. Less attractive because it will take a while to get those funds paid back but using our money is an
option if we wanted to do that out of reserves and fund balance
Travis Storin; From a scalability perspective, we have gone at this from the view that the city cannot be the
banker long term - Staff assessment to date is that it is unattractive to use our own money to deploy loans
Darin Atteberry; what is the cost premium for the plain vanilla swap?
Travis Storin; currently it would be 25-50 basis points above the prevailing variable rate.
100 basis points of spread between our overall costs and the costs the consumer sees- this is not intended to be
money making. We previously offered a 20-year product, but we are not going to offer 20-year product in the
future.
Mike Beckstead; one of our tenets is we don’t borrow money for a shorter period than we loan money.
Ross Cunniff; 15-year loans would be for HVAC and largely for multi-family rental housing. Do we ask for any
collateral?
Travis Storin; UCC filing - right to shut off the utility - No defaults in 300 loans we have issued
Ross Cunniff; heading down the road of using our own capital – one of the considerations to mitigate our risk
Sean Carpenter; more comprehensive programs – folks also want that 15-year loan - Want to prove our
hypothesis – positive impacts from these upgrades / changes.
Variable draw period lines up with program parameters nicely
Mike Beckstead; we are thinking $1.5 - 2M a year in loans - Can we get an option for year 3 from the lenders if
we don’t draw at all or do we renegotiate a separate program in year 3 – our expectation is that we won’t use
$6M in a two year process - we will be 2/3 of that at best based on our historical loan rates - still some
ambiguity with what we do in year 3
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Mike Beckstead; August 20P
th
P is the design to put these in place in time to support the program - we are not
presuming Council Finance is going to support. That date is subject to this discussion.
Ken Summers; what is the largest amount we would loan in a 15-year time frame?
Sean Carpenter; $25K is the maximum loan amount - multi-unit apartment buildings, duplex / triplex / quad plex
- larger than that would be commercial. Average loan size is in the $11-12K range. Larger would include solar -
other features - solar companies - attractive financing
Ross Cunniff; heat pump type installation - solar which as an obvious payoff - solar companies are able to create
their own deals
Sean Carpenter; after almost a year of prototyping these with rental property owners, we learned that the
15 year was critical to get monthly payments down - to incentivize them to make these upgrades on older,
inefficient properties.
Ross Cunniff; I understand and support the analysis - I don’t know about question #3 - what is your
recommendation as of now?
Mike Beckstead; I haven’t had a chance to meet with Lance Smith to investigate implications - borrowing
variable and lending fixed is a non-starter for me so that is where the swap comes into play. 25-50 basis point
premium - that is a way to contain risk. Making sure we are not lending at low end of curve then locking in a
higher end. Our ability to adjust rates when we need to - Can’t borrow low and lend high
Action Item; Keep Option 3 separate – We have work to do to tighten up before 20P
th
Research on interest rate
Ross Cunniff; come back to Council Finance to discuss #3 (15-year product)
#1 and #2 sources can come forward on the 20P
th
P but let’s discuss #3 again at Council Finance (scheduled for
August 19P
th
P)
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Darin Atteberry; A brief synopsis / read before would be helpful
B. Northfield Metro District Application
Josh Birks, Director Economic Sustainability
SUBJECT FOR DISCUSSION
Proposed Metro District by Landmark Homes for the Northfield Metropolitan District
EXECUTIVE SUMMARY
The developer of the proposed Northfield Metro District has submitted a Metro District Service Plan to
support a proposed development of approximately 56 acres located north of Vine Street on the west
side of Lindenmeier Road/Lemay Avenue (southeast of the Lake Canal and north of the to-be
designated historic Alta Vista neighborhood). The development is anticipated to include approximately
442 attached housing units, of which a minimum of approximately fourteen percent (14%) will be
designated and sold as deed-restricted affordable housing, and the majority of the rest of the units will
be sold as attainable housing units. The Planned Development is also anticipated to include a mixed-
use center that will offer light commercial use on the first floor, residential for-rent units on the second
floor, and small amenities open to the public. The estimated population at build-out is 1,139.
Construction of the Planned Development is planned to be completed by year 2026.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. What additional information does the committee recommend including for the Council evaluation
of the Landmark Development’s proposed Metro District Service Plan?
BACKGROUND/DISCUSSION
Landmark Homes is proposing a residential community situated within walking distance of the City’s
Old Town. The Planned Development incorporates goals of the following plans: City Plan,
Transportation Master Plan, Master Street Plan, Nature in the City Strategic Plan, Natural Areas Master
Plan, Paved Recreational Trail Master Plan, Northside Neighborhoods Plan, Pedestrian Plan, and Bicycle
Master Plan.
PROJECT OVERVIEW
The proposed Metro District will support 56 acres of planned development located north of Vine Street
on the west side of Lindenmeier Road/Lemay Avenue (southeast of the Lake Canal and north of the to-
be designated historic Alta Vista neighborhood). The project anticipates constructing:
• Approximately 442 residential units (a mix of single-family and multi-family);
• Minimum of 14.7% affordable (65 units)
• The remaining housing units in the project are expected to be priced in an attainable range,
considered by other cities to be between 80% and 120% of AMI.
• A mixed-use center that will offer light commercial use on the first floor, residential for-rent units
on the second floor, and small amenities open to the public
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• An enhanced setback from the Lake Canal Wetlands to further protect them from new
development; and
• On-site Regional Trail as well as the off- site pedestrian connection for the northeastern portion up
to the intersection at Lemay Avenue and Conifer Street.
METRO DISTRICT
Landmark Homes has submitted the Consolidated Service Plan for Northfield Metropolitan District Nos.
1-3 (the “Service Plan”). The Metro District would be used to construct critical public infrastructure and
other site costs reducing the overall development costs.
Service Plan Overview
The Service Plan calls for the creation of three Metro Districts working collaboratively to deliver the
proposed Northfield development. The phased development is anticipated to occur over the next nine
plus years and support an estimated population of 1,139. A few highlights about the proposed Service
Plan, include:
• Assessed Value – Estimated to be approximately $13.3 million in 2029 at full build-out
• Aggregate Mill Levy – 50 mills, subject to Gallagher Adjustments
• Debt Mill Levy – 40 mills, may not be levied until an approved development plan or
intergovernmental agreement has been executed that delivers the pledged public benefits
• Operating Mill Levy – Up to an additional 10 mills (total levy 50 mills) to fund several on-going
operations, such as but not limited to: (a) a non-potable irrigation system, and (b) road
infrastructure. Once a District imposes a Debt Mill Levy, such District’s Operating Mill Levy cannot
exceed ten (10) mills at any point.
• Maximum Debt Authorization – Anticipated to be approximately $16 million to cover a portion of
the estimated $31 million in project costs
• Regional Mill Levy – The regional Mill Levy shall not be counted against the Aggregate Mill Levy
Maximum
Public Improvements
The Service Plans anticipate using the Debt Mill Levy to support the issuance of bonds in the maximum
amount of $16 million to fund all or a portion of the following $31 million in public improvements
(details available in Exhibits D and G of the Service Plan):
• Earthwork and Grading – Approximately $6.7 million in earthwork and site preparation costs
associated with the proposed project.
• Roadway Improvements – Approximately $6.4 million in costs to construct asphalt infrastructure
for streets and parking on the project, including Suniga arterial.
• Water Improvements – Approximately $0.6 million in costs to construct potable water
infrastructure supporting the project.
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• Sanitary Sewer Improvement – Approximately $0.7 million constructing the sanitary sewer
infrastructure, including upsizing, both on- and off-site for the project
• Storm Sewer Improvements – Approximately $1.9 million in costs to construct the main storm
sewer system and infrastructure for the project.
• Open Space/Landscaping – Approximately $4.1 million in costs for Regional Trail construction,
neighborhood park development, development of clubhouse/pool, and other landscaping
• Misc. / Amenity – Approximately $5.7 million in miscellaneous costs associated with the project,
such as engineering, inspection, and administrative costs, plus a 20% contingency estimate of $5.2
million.
Public Benefits
As required by the proposed new policy, the Service Plan will deliver several extraordinary development
outcomes that support several public benefits. A general list of benefits and, where available, their
estimated value is described below (details in Exhibit G of the Service Plan):
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Northfield Metro District Public Benefits Evaluation
Non-Basic
Improvements
Total Benefit Per-Unit Benefit Notes
Solar Environmental 1) Energy 13-14 kW of solar Sustainability power per "Flats" building $448,000 $1,014 $28,000 per building; 180 units benefit
Electric Vehicles
1) 240V outlets $375,000 $848 In every garage, besides the affordable homes
2) EV charging stations $30,000 $68
Critical Public Infrastructure
Major 1) Arterial On-Site Development Suniga Road Upsizing $1,682,640 $3,807 Upsizing cost from a typical 2-lane connector
1) Off-Site Suniga Road $774,800 $1,753 Offsite construction from Redwood to Lake Canal
Pedestrian Connectivity
1) Regional Trail Construction $199,050 $450
Off-Site Infrastructure
1) Off-Site Sewer Construction & Upsizing $538,220 $1,218
To benefit Northfield and the surrounding areas from a failing sewer line
2) Lemay Overpass Contribution $250,000 $566 Estimate
Smart Growth Management
Increased 1) Alley-Density Loaded Homes $820,800 $1,857 Metro District maintained
Public Spaces
1) Reduction in Allowed Density/ More Open Space $4,474,100 $10,122
Northfield is at 8 units/acre vs the allowed 12 units/acre per the "affordable
housing project" land use definition
2) 3) Clubhouse Increased Landscaped & Swimming Area Pool (46.9% of site) $$2,723,000,800 000 $$4,1,525 638 Landscaped area beyond a typical project
4) Alta Vista Buffer Area $125,000 $283 Separates and protects the Alta Vista neighborhood from Suniga
5) Public amenity area $5,000 $11 Public use amenities stationed along regional trail
Affordable Strategic 1) 14.7% Housing Priorities (65 units) of deed-restricted affordable housing $4,420,000 $10,000 $68,000 subsidy per unit to price below 80% AMI
Attainable Housing
1) 85.3% (377 units) of attainably priced housing Difficult to Quant. Difficult to Quan.
Remainder of project will be priced in a range that someone making 80% to 120%
of AMI could afford
TOTAL PUBLIC BENEFITS $16,866,410 $38,159
Disclaimer: The benefits listed above represent a preliminary estimate in order to provide illustrative representation of the value for public benefit. The illustration is non-
binding pending the execution of a development agreement
Units: 442
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• Affordable Housing - The financing and reimbursement options created by the Metropolitan
Districts will enable the Northfield project to deliver a minimum of 160 units or 10% of the total
project at affordable rates. These units will be delivered under the following guidelines:
o For Sale: A minimum of 65 units (14.7%) will be for sale
o Enforceability: Prior to or concurrent with Development Agreement, Northfield will
create legally enforceable guarantees for affordable housing commitments. Potential
options include, contract with City for Land Bank, deed restriction, reservation of
acreage
• Environmental Sustainability:
Energy Conservation - Northfield plans to include solar panels on the 12-unit condominium
buildings and the community clubhouse that will provide up to 14 kilowatts of power per
building. These solar panels will provide the power needed for the common area spaces,
including elevators. The renewable energy provided by the solar panels will also decrease the
common-space maintenance burden for residents in the condominium buildings. Northfield
will also deliver a 240V outlet in every garage to provide a place for the electric vehicle fast-
charging stations and further encourage residents to drive eco-friendly cars.
Environmental Conservation - The project provides an enhanced setback from the Lake Canal
Wetlands to further protect them from new development. The connections over Lake Canal will
be constructed with low impact box culverts and abide by and exceed Army Core of Engineers
standards for historic protected wetlands. Landscaped areas will focus on low-water usage
designs. Initial hydro-zone calculations indicate Northfield will use 7.63 gallons of water per
square foot, well below the City’s limit of 15 gallons of water per square foot
• Off-Site Sewer Improvements - Northfield plans to replace and upsize the sewer line from Vine
Drive, around Alta Vista, and along a portion of Lemay Avenue.
• Regional Trail - Rather than simply designating an on-site easement for the future trail
construction by the City, Northfield plans to finance and deliver the on-site Regional Trail as
well as the off- site pedestrian connection for the northeastern portion up to the intersection at
Lemay Avenue and Conifer Street.
• Community Gateway - Northfield will promote the City’s objective of preserving and enhancing
historic resources. The southeastern edge of Northfield borders the to-be-designated historic
Alta Vista neighborhood. To blend the transition to new development and pay homage to the
neighborhood’s history, Northfield will feature an Interpretive Historical Park and Gateway
Features bordering Alta Vista. These additions were developed in collaboration with neighbors
in the Alta Vista neighborhood and would provide an extraordinary benefit to the City as a
whole.
• Economic Health Outcomes - Northfield is located within walking and/or biking distance to
some of the largest employment hubs in the City, including City of Fort Collins Municipal
Offices, Colorado State University, Woodward, and New Belgium Brewing. Northfield's
proximity to these hubs and affordable and its attainable price points set the project apart from
other recent residential developments in Fort Collins. Through Northfield, the City will gain
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high-quality, attainable housing near the City’s economic and cultural core, helping reduce
congestion in the City and provide workforce housing.
Policy
The conceptual use of a Metro District at Northfield complies with the City’s existing policy.
POLICY EVALUATION & PUBLIC BENEFIT ASSESSMENT
The proposed update to the policy supports the formation of a Metro District regardless of
development type when a District delivers extraordinary public benefits. The public benefits should be:
(1) aligned with the goals and objectives of the City whether such extraordinary public benefits are
provided by the Metro District or by the entity developing the Metro District because Metro Districts
exist to provide public improvements; and (2) not be practically provided by the City or an existing
public entity, within a reasonable time and on a comparable basis. The Service Plan for the Northfield
Project delivers several proposed policy outcomes
Triple Bottom Line – Scan
An interdisciplinary staff team prepared a Triple Bottom Line Scan of the proposed Service Plan. The
net analysis is generally neutral to slightly positive. The highlights are provided below:
Economic – The proposed affordable housing is expected to have a positive impact on retaining
and attracting talent to strengthen our local labor force for employers. The pricing of the remaining
homes at 80-120% of AMI meets the community’s needs for housing at that income level.
Northfield is located within walking and/or biking distance to some of the largest employment
hubs.
Environmental – Some benefit is expected from the proposed solar, but overall the proposed
environmental public benefits were interpreted as weak by staff under the current proposal.
Additional clarity is needed to assess any improved benefit.
Project Current Policy
Mill Levy Caps 50 Mills 50 Mills
Basic Infrastructure Partially To enable public benefit
Eminent Domain Will Comply Prohibited
Debt Limitation Will Comply 100% of Capacity
Dissolution Limit Ongoing for O&M 40 years (end user
refunding exception)
Citizen Control Will Comply As early as possible
Multiple Districts Yes Projected over an
extended period
Commercial/
Residential Ratio Residential
N/A
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Social – This area is expected to have the most positive impact due to the commitments to
affordable housing. The proposal could be strengthened with a greater focus on affordable housing
(e.g. 15% affordable) and clearer expectations around deed restriction over time.
FINANCIAL ASSESSMENT
Utilizing the District’s Financial Plan, the City reviewed the Financial Plan in partnership with Economic
& Planning Systems. The review concluded the following:
• The proposed mill levies are in line with the City’s policy.
• The market values used in the public revenue estimates are reasonable.
• EPS expressed concern about residential absorption of Northfield in the context of other new North
College developments: Waterfield, Water’s Edge, and Montava.
• EPS found it difficult to assess if there would be “extraordinary benefits” with the following:
clubhouse and swimming pool, allowed density/more open space, and increased landscaped area.
DISCUSSION / NEXT STEPS:
Josh Birks; developer will provide 240v outlets in all garages which is above standards
Most significant stretch goal is the affordable housing
Ross Cunniff; 240v outlets are not that expensive - might be $100 when house is being constructed - not a huge
differentiator. I think we need to tighten up the requirements - such as assurances of the supply of 14.7 % of
affordable housing units - seems that some previous plans still run at the full mill rate. Likewise, ratchet up the
environmental benefits - I would like to see more from this. More information about metro districts could lead
to adjustment to policy.
Josh Birks; Would there be specific things you would like to see in the environmental and construction?
Ross Cunniff; ground source heat pump for clubhouse would be interesting - other ways to address the non-
electric portion - greenhouse gas inventory
Josh Birks; We have seen some other applications come in with DOE Zero Energy Standard.
Affordable housing is a two-step process; the Service Plan creates the promise and then the Development
Agreement confirms the contractual obligation. The one plan that has gone through we heard feedback from
yourself and others on Council about tightening up the delivery of the affordable housing - there were some
things in the Development Agreement that we will steer clear of in future developments.
Ross Cunniff; it is only fair to let the applicant know that moving forward this is where we are headed
Ken Summers; Site plan details - commercial?
Josh Birks; southwest corner just north of Suniga is planned to have a small building with ground floor
commercial and 2 rental or condo units above - community serving commercial uses - could be daycare or other
amenities for the community. Adjacent to that, they will have some public amenities - a stopover station for
bicyclists - along the western edge there is a major regional bike connection - bike repair facility
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Ross Cunniff; sewer - some is regional benefit? Does providing the regional benefit create any additional costs?
Is the city putting any funding in?
Josh Birks; the reason we have counted it as a stretch goal / public benefit - the timing under which the city
would have the capital to make this upsizing which is needed doesn’t coincide with their timing for the
development so there is a portion they need to do for the project to work and then there is a portion that is
regional - they are proposing that the metro district would fund both their portion and the regional portion and
that the city would not contribute at all.
Ross Cunniff; concern that homeowners in that area paying extra taxes for a regional benefit
Josh Birks; we look at the margin that is regional coming back as a repay fund as opposed to being long term
funding - might be short term funded by the metro district
Mayor Troxell; unless there is a compelling interest for the utility needs to have the funding
Darin Atteberry; it is probably timing – it is on the list - a cadence issue more than anything else
Josh Birks; we will do more follow up and will include that in the write up. Any concerns with this additional
input still moving forward to Council? The applicant would like to be ready for the November ballot. We have
this scheduled for September meetings which is getting close to that deadline. Any concern with us sticking to
that timeline?
Ross Cunniff; it is ok to bring this forward as a Discussion Item
Mayor Troxell; can you talk about energy side
Josh Birks; page 4 of the AIS
3 main components;
1) Solar in 40% of units
2) Each building would generate 13-14 kW sufficient to offset the common area and power the clubhouse
3) 240v outlets - fast charging station in every garage which also includes cabling back to the main which
they value at approximately $850 per unit - ready for plug and go - plus a couple charging stations -
adjacent to commercial space open for public use
ACTION ITEM:
Mayor Troxell; How is it integrated into the distribution system and managed appropriately? Is it net zero
behind the meter or is it an integration into the electric distribution system?
Josh Birks; I believe that it is net zero behind the meter but let me confirm and provide more information.
ACTION ITEM:
Mayor Troxell; there is some public cost for the distribution on the demand management side
Josh Birks; I will figure out how that cost plays in - the PIFS that are part of the construction fees or how we are
managing that - we will provide more information.
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Mayor Troxell; since this is a planned development there may be a point of common coupling to the main
system - managed accurately - load balancing type stuff
Ross Cunniff; big picture - my thinking has evolved a bit - these property owners are paying 50 mills – I think we
need to find ways to ensure the benefits meet our city and policy goals and to the residents who will be paying
for them – otherwise it is just another tax revenue source and that is not fair.
Josh Birks; that raises an interesting question regarding interplay between the stretch goals we have set / on-site
amenities and some of the basic infrastructure things that need to get funded. Do we balance the two sides of
the scale - stretch goal to public infrastructure? Is there any benefit to the local residents - maybe it also still
delivers value.
Ross Cunniff; things like lower energy costs / energy efficiency and solar do provide benefits to the residents.
The sewer issue is kind of concerning.
Josh Birks; as staff we are wrestling with that same question as it relates to how much affordable we want to see
- because 10% meets our standard - out goal is 10% of our stock - affordable housing goals - they are offsetting
their impact - the residents paying if they are providing more affordable housing
Council Finance Committee approved bringing this forward to Council for discussion.
C. Sports Complex Evaluation
Marc Rademacher, Recreation Manager
Bob Adams, Director of Recreation
Mike Calhoon, Director of Parks
SUBJECT FOR DISCUSSION
Summary of Executive Report regarding a council-requested Sports Complex Economic Impact and Feasibility
Study.
EXECUTIVE SUMMARY
Staff was requested by Council to conduct a study regarding the economic impact and feasibility of a multi-use
sports complex in city limits. Hunden Strategic Partners (HSP) was selected through a competitive RFP process to
run the study, which was funded through the 2017-18 BFO process. HSP completed the study and has provided
an executive summary of results, as well as three recommendations for facilities and their expected economic
impact.
This presentation will provide a high-level overview of the summary, with the full report being provided as an
attachment.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Would Fort Collins benefit from the addition of a multi-use sports facility of some kind?
2. Does Council want to pursue this further?
BACKGROUND/DISCUSSION
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In 2016 Council requested staff to complete a Sports Complex Economic Impact and Feasibility study. Funded
during the 2017-18 BFO process, the study was completed by Hunden Strategic Partners. Key questions that HSP
was tasked with answering were:
• What is the market opportunity for a new sports complex development in Fort Collins?
• What is the existing supply of sports/recreation facility in Fort Collins and the surround area? What is the
level of local demand for a new complex?
• What is the existing state and regional supply of sports complexes that are capable of hosting large
tournaments and events? Would a new facility in Fort Collins present opportunities to host larger
tournaments?
• How is the area hotel market performing? How does this impact the market opportunity for a new sports
complex?
• Based on the comprehensive market analysis, what are the conclusions and recommendations?
• What are the possible scenarios and site options available for a new facility?
Hunden Strategic Partners conducted a thorough study and will be attending a Council work session in August to
present the executive summary of their finding and recommendations.
Staff will await further direction from Council and City leadership before taking any next steps regarding the
complex.
DISCUSSION / NEXT STEPS:
Darin Atteberry; this offer that was requested and funded in the 2017-18 BFO Cycle
This conversation will play well into our Parks & Recreation conversation later this fall.
Mayor Troxell was a champion for this early on
Topic is scheduled for a Council Work Session on August 13P
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This was a request from Council. We issued an RFP and hired consultants, Hunden Strategic Partners
to conduct an Impact & Feasibility Study - they also conducted an Inventory of all existing facilities and
met with user groups.
Mayor Troxell; identify gaps - strategic - thinking about those things we are not seeing
Exec Summary Highlights – we received a 240-page document from Consultants
2 previous indoor turf facilities have closed or in the process of closing
Need multiple fields (8-16) to bring in tournaments
$27M to build - 70K square feet
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Bob Adams; we would be working in a deficit on this and would need to be subsidized approximately 30%
Very similar to our other recreational facilities
What are the goals? Sports tourism or give our residents what they are looking for?
Do we want to go forward? Funding?
Mayor Troxell; we should think about the intersection with donative interest - what is that interplay?
I started discussing this more internally - ultimate frisbee started here - we can hang our hats on those things –
things that are unique and are drivers here - what is the opportunity? Analysis of all Olympic sports? Availability
of resources? This is a great place for conditioning due to elevation - Establish interest - there might be a gold
nugget in there somewhere - provide for world class facilities that would set Fort Collins apart - Uniquely Fort
Collins. The fastest pool where Olympic competitors go to set records is in Indianapolis - their natatorium was
built intentionally for this purpose - Indy has been very strategic with their location - amateur sports - AAU /
NCAA - they came together as a community and said this will be the national headquarters for amateur sports –
they have facilities that can support national competitions. Thinking of CSU and other partners –
underperforming facilities - South College Gym may be an underutilized. CSU $4M invested in Christiansen track
and it is now closed off to the public. Access to track for citizens - think not just in terms of a utility but in terms
of opportunity and strategy. Would be interesting to solicit - put together an engagement - thinking about
things we may not be aware of
Darin Atteberry; this discussion feeds well into our Parks Master Plan – it is not a municipal solution - could be
all public or public private - philanthropic - there is interest - timing is actually perfect – Will be good to have a
Working Session with Council to see where they are with it.
Ross Cunniff; From page 40 of the Executive Summary document - all options are losses
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Bob Adams; Annual Operations - Synthetic turf replacement - we would have to come back for major repair
costs (similar to Epic Pool renovations)
ACTION ITEM:
Kelly DiMartino; we can add some additional information regarding major maintenance before we come back
Ross Cunniff; new taxes collected - is that lodging tax based on the nights and restaurants?
Marc Rademacher; Yes, page 27 of the Executive Summary Document shows Heat Charts - where the hotel
rooms. They were very excited about these as they show hotel room usage – bringing in tournaments – how the
hotels could be brought to capacity. Hotels are excited for the potential in the winter months when they see
their numbers drop - Room nights that are available
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Ross Cunniff; I think the discussion in the Work Session will focus on Who benefits? Who pays? Appropriate
funding mechanisms? Not immediately obvious that the opportunity cost of engaging this is the best place for
the city to be spending.
Darin Atteberry; to your point about major repair and replacement costs - typical office building runs around 4%
- it would be a bit higher for this type of facility - unique features - with things like turf - like replacing carpet -
you are not going to have a lot of other maintenance issues - might be simpler HVAC - industry rule of thumb is
3-4%
Ross Cunniff; I expect it to vary – important to go in with eyes open which is one of the reasons I have been
concerned about city owned.
Ken Summers; relative to what Mayor Troxell says – I lean more toward the outdoor facility - we need to do a lot
of work – I think it gets trickier if we are delving into areas that are not in the mainstream of athletic events and
team sports
I was in Branson MO for grandson’s national baseball tournament - 4 fields - each field was modeled after a
major baseball park – they have been running tournaments through there all summer
Scenario #2 - 16 fields - I am not sure if the demand for 8 full size fields really addresses a need - you would need
stadium seating for a couple thousand people. In terms of scalability – I would question the wisdom of plunking
own $27M for 16 ball fields without doing a lot of work even across the nation what current facilities look like –
what have they learned? What would they do differently? Maybe we need to do some follow up on our own
facilities - CSU offers opportunities to house teams along with dining facilities
I am excited - 400-foot fence is larger than most major league parks
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Marc Rademacher; they did that so they could put soccer fields in the outfields
Ken Summers; This is something worthy to keep talking about and investing time in. We need to look at what is
practical and do a deeper drive – is that something we should do this with every field? Softball fields - replace 8
full size baseball fields with soccer fields. City of Canton or Alpharetta, Georgia - they built a facility – they had
enough private clubs commit to leasing time and space - a public / private partnership - check into the details
with other communities who have done this - costs and feasibility - I like the concept of sports tourism - a big
plus
Marc Rademacher; the consultant said 16 is the number we would need to bring national tournaments
We have a partner here in Fort Collins - Triple Crown Sports - with 16 fields we could move some major
tournaments here
Ken Summers; would be interesting to see where those facilities are - compare to others smaller in size. What is
the sweet spot cost / revenue efficiency side / return? The difference between 8 and 16 fields.
Bob Adams; Aurora, CO has a very large sports complex
Ross Cunniff; did the consultants consider other regional proposals – Windsor or Loveland?
Marc Rademacher; we were told it was dead, but it came back - Chris Perkins was very involved
Early to say whether it is happening - their key was a park for their minor league team
Ross Cunniff; Ultimate report should include competitive analysis if that did happen
Marc Rademacher; The Ranch also has some athletic facilities
Mike Beckstead; lots of good feedback for coming back to the Work Session on August 13P
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Meeting Adjourned at 12:13 pm
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Travis Storin, Accounting Director
Date: August 19, 2019
SUBJECT FOR DISCUSSION: Status of Fund Balances and Working Capital
EXECUTIVE SUMMARY:
The attached presentation gives a status of fund balances and working capital. Fund balances are
primarily considered for funding one-time offers during the Budgeting for Outcomes process.
To a lesser extent, available monies are also used to fund supplemental appropriations between
BFO cycles.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
None, this is an update for Council Finance Committee.
BACKGROUND/DISCUSSION
To communicate what funding is available to support emerging issues and initiatives in the next
budget cycle. In each fund the balances are shown vertically by the accounting classifications.
The amounts are then additionally categorized into Appropriated, Available with Constraints,
and Available for Nearly Any Purpose.
Appropriated, Minimum Policy or Scheduled is comprised of minimum fund balances
established by policy, funds from the 2018 balance that have been appropriated in 2019, funds
set aside for 2020 in the 2019-2020 budget, and amounts for projects specifically identified by
voters. An example of the later is Community Capital Improvements Plan.
Available with Constraints are those balances available for appropriation but within defined
constraints. An example is 4P
th
P of July donations. They are restricted for that purpose, but still
available for appropriation.
Available for Nearly Any Purpose are balances that are available for appropriation at the
discretion of the City Council.
ATTACHMENTS
A. PowerPoint presentation
Status of Fund Balances
Travis Storin, Accounting Director
August 19, 2019
Objectives
• Types of constraints
• Availability of restricted balances
• Review fund balances
• Using fund balances in the budget process
2
Fund Balance Definitions
Non-spendable
• Non-liquid in form (e.g. inventory, long-term receivables, land)
• Legally or contractually required to be maintained intact (e.g. permanent
endowments)
Restricted
• Externally enforceable legal restrictions (e.g. TABOR emergency reserve, debt
covenants, re-development agreements, IGA’s)
Committed
• Constraint formally imposed at the highest level of decision making authority
through Ordinance (e.g. Capital Expansion fees, Neighborhood Parkland fees)
Assigned
• Intended to be used for specific purposes (e.g. Affordable Housing, Camera
Radar, Encumbrances)
Unassigned
• Available for any City purpose
• Reported only in the General Fund except in cases of negative fund balance
most
constrained
least
constrained
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Use of restricted balances
Available but with some constraints
• Keep Fort Collins Great (KFCG) categories are restricted but available
as defined in the ballot language
• Udall Endowment interest is restricted but available to be appropriated
for maintenance and improvements of Udall Natural Area
Available for nearly any purpose
• Funds available at the discretion of the City Council for any municipal
purpose
4
5
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
General Fund $ 69.8 $ 66.3 $ 55.2 $ 4.2 $ 6.9
Capital Expansion Fund 17.8 19.5 1.5 18.0 -
Sales & Use Tax Fund 0.7 0.8 0.8 - -
GID #1 Fund 0.8 0.7 0.1 0.6 -
Keep Fort Collins Great Fund 12.7 9.8 7.4 2.4 -
Community Capital Imprvmt Plan 8.0 12.7 10.0 2.7 -
Neighborhood Parkland Fund 9.7 10.1 6.7 3.4 -
Conservation Trust Fund 3.0 2.3 1.1 1.2 -
Natural Areas Fund 16.8 18.6 12.4 6.2 -
Cultural Services Fund 2.6 2.2 1.3 0.4 0.5
Recreation Fund 2.3 2.5 1.1 1.4 -
Cemeteries Fund 0.7 0.8 0.5 0.3 -
Perpetual Care Fund 1.9 2.0 - 2.0 -
Museum Fund 0.9 0.7 0.2 0.5 -
Transit 4.2 3.4 3.4 - -
Transportation Capital Expansion 25.1 24.9 9.3 15.6 -
Transportation 15.4 14.6 7.5 - 7.1
Parking Fund 1.8 1.5 0.5 1.0 -
Capital Projects Fund 17.6 12.0 9.3 2.7 -
Golf Fund 0.4 0.7 0.3 0.4 -
Light & Power Fund (excl. Broadband) 33.5 30.8 22.4 8.4 -
Water Fund 61.6 70.2 39.7 30.5 -
Wastewater Fund 41.4 42.8 20.6 22.2 -
Storm Drainage Fund 17.4 19.5 11.2 8.3 -
Equipment Fund 2.0 3.6 1.8 1.8 -
Self Insurance Fund 1.6 2.7 1.5 1.2 -
Data & Communications Fund 3.7 3.4 1.8 - 1.6
Benefits Fund 9.3 11.7 7.4 4.3 -
Utility Customer Service Fund 2.6 1.7 0.8 0.9 -
TOTAL $ 385.3 $ 392.5 $ 235.8 $ 140.6 $ 16.1
All City Funds
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2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned - Minimum 60 day Policy $ 25.3 $ 26.0 $ 26.0 $ - $ -
Non-spendable
Advances 4.9 4.7 4.7 - -
Landbank inventory 1.5 1.5 1.5 - -
Udall Endowment 0.1 0.1 0.1
Restricted
TABOR Emergency 6.9 7.0 7.0 - -
Police Programs 0.9 0.3 0.2 0.1 -
Donations & Misc 0.9 1.2 0.8 0.4 -
Economic Rebates 2.6 1.7 0.4 1.3 -
DDA/Woodward Debt 0.7 0.7 - 0.7 -
Committed
Traffic Calming - 0.2 - 0.2 -
Culture & Recreation 0.2 0.4 0.3 0.1 -
Affordable Housing Land Bank 1.3 1.4 - 1.4 -
Assigned
Prior Year Purchase Orders 4.3 3.7 3.7 - -
Manufacturing Use Tax Rebate 0.7 1.2 1.2 - -
Transit Bus Replacement 0.5 0.5 0.2 - 0.3
Golf Irrigation System 0.5 0.5 0.1 - 0.4
Revenue Contingency 4.4 2.2 - - 2.2
Camera Radar 0.9 1.1 - - 1.1
Waste Innovation 0.2 0.2 - - 0.2
Reappropriation 1.0 0.3 0.3 - -
Budgeted use of reserves 7.3 8.7 8.7 - -
Unassigned 4.8 2.7 - - 2.7
Year End Total $ 69.9 $ 66.3 $ 55.2 $ 4.2 $ 6.9
General Fund - Year End 2018 - $66.3
General Fund Balances
• $4.7 loaned to URA (Advances)
• $1.5 Land-bank program, estimated market value
• $7.0 is an emergency reserve required by TABOR, equal to 3% of qualified
governmental revenue; City also has policy setting an additional $26M aside
• $1.3 restricted by donor for various purposes (Horticulture, Udall Endowment,
etc)
• $1.7 is restricted to Economic Incentive Rebates
• $0.7 is for debt contingency on DDA debt obligation to Woodward
• Traditionally fund balances are assigned for camera radar and photo red-light,
public safety dispatch system, affordable housing and waste innovation
• $12.7 is set aside for prior year purchase orders, reappropriation, and budgeted
use of reserves
9
• $2.4M is available for a future BFO cycle
10
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Street Maintenance 3.6 3.9 2.7 1.2 -
Other Transportation 1.9 0.4 0.4 - -
Police Services 3.7 2.9 2.4 0.5 -
Fire & Emergency Services 0.2 0.1 - 0.1 -
Parks & Recreation 1.5 1.3 1.0 0.3 -
Other 1.8 1.2 0.9 0.3 -
Year End Total $ 12.7 $ 9.8 $ 7.4 $ 2.4 $ -
Keep Fort Collins Great Fund - Year End 2018 - $9.8
• Continue to invest in capital assets, in part by using working capital
• Light & Power likely to issue debt in 2023
11
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 25% Operations $ 8.4 $ 8.3 $ 8.3 $ - $ -
Assigned
Prior Year Purchase Orders 1.4 1.9 1.9 - -
Approved Capital Projects 7.8 11.9 11.9 - -
Budgeted Use of Reserves 10.4 0.3 0.3 - -
Available for Capital and Operations 5.5 8.4 - 8.4 -
Year End Total $ 33.5 $ 30.8 $ 22.4 $ 8.4 $ -
Light & Power Fund (excl. Broadband) - Year End 2018 - $30.8
• Increase in part due to maturities of debt in 2018 and 2019
12
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 25% Operations $ 5.0 $ 4.6 $ 4.6 $ - $ -
Assigned
Prior Year Purchase Orders 0.4 0.3 0.3 - -
Approved Capital Projects 33.5 34.8 34.8 - -
Budgeted Use of Reserves 0.6 - - - -
Available for Capital and Operations 22.1 30.5 - 30.5 -
Year End Total $ 61.6 $ 70.2 $ 39.7 $ 30.5 $ -
Water Fund - Year End 2018 - $70.2
13
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 25% Operations $ 3.5 $ 3.6 $ 3.6 $ - $ -
Assigned
Prior Year Purchase Orders 0.3 0.3 0.3 - -
Approved Capital Projects 10.8 15.6 15.6 - -
Budgeted Use of Reserves 6.8 1.1 1.1 - -
Available for Capital and Operations 20.0 22.2 - 22.2 -
Year End Total $ 41.4 $ 42.8 $ 20.6 $ 22.2 $ -
Wastewater Fund - Year End 2018 - $42.8
• Utilities long-term financial plan and capital improvement plan to be reviewed with Finance
Committee on 12/16
14
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 25% Operations $ 1.7 $ 1.9 $ 1.9 $ - $ -
Assigned
Prior Year Purchase Orders 0.1 0.1 0.1 - -
Approved Capital Projects 7.0 9.2 9.2 - -
Budgeted Use of Reserves 1.1 - - - -
Available for Capital and Operations 7.5 8.3 - 8.3 -
Year End Total $ 17.4 $ 19.5 $ 11.2 $ 8.3 $ -
Storm Drainage Fund - Year End 2018 - $19.5
• Utilities long-term financial plan and capital improvement plan to be reviewed with Finance
Committee on 12/16
15
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Policy minimum $ - $ - $ - $ - $ -
Assigned
Prior Year Purchase Orders 0.3 0.3 0.3 - -
Budgeted Use of Reserves - 0.5 0.5 - -
Unrestricted 2.3 0.9 - 0.9 -
Year End Total $ 2.6 $ 1.7 $ 0.8 $ 0.9 $ -
Utility Customer Service Fund - Year End 2018 - $1.7
16
Back-up slides
• Monies collected on building permits, revenue varies greatly with development activity
• Must be used for new and/or expanding facilities
• $0.9 in loans to the URA (RMI2) in General Government
• Police monies used for debt on police headquarters
• $4.7 is for remaining two planned Community Parks (East and Northeast)
17
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Committed
General Government 11.0 12.0 0.9 11.1 -
Police 0.8 0.8 - 0.8 -
Fire 0.8 1.4 - 1.4 -
Community Parkland 5.2 5.3 0.6 4.7 -
Year End Total $ 17.8 $ 19.5 $ 1.5 $ 18.0 $ -
Capital Expansion Fund - Year End 2018 - $19.5
• Sales Tax for Natural Areas deposited here according to ballot language
– Residual balance of $0.8 owed to Natural Areas. 2018 revenue exceeded appropriations
needed to make transfers.
– Will be addressed in annual year end adjustment ordinance in September 2019.
18
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Natural Areas 0.7 0.8 0.8 - -
Year End Total $ 0.7 $ 0.8 $ 0.8 $ - $ -
Sales & Use Tax Fund - Year End 2018 - $.8
• Property tax based - 4.924 mill levy generates about $300k annually
19
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Committed
Capital Improvements 0.8 0.7 0.1 0.6 -
Year End Total $ 0.8 $ 0.7 $ 0.1 $ 0.6 $ -
General Improvement District #1 Fund - Year End 2018 - $0.7
• Project-by-project amounts represent unspent funds already appropriated
20
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Available for ballot projects 0.2 2.7 - 2.7 -
City Park Train 0.4 0.2 0.2 - -
Club Tico Renovation 0.0 0.0 0.0 - -
Poudre River Proj (CCIP only) 4.2 4.0 4.0 - -
Gardens Visitor Center Expansion - 1.8 1.8 - -
Nature in the City 0.2 0.3 0.3 - -
Affordable Housing Fund 0.5 0.5 0.5 - -
Arterial Intersection Imprvmnt 0.5 0.2 0.2 - -
Bicycle Infrastructure Imprvmt 0.2 0.2 0.2 - -
Bike/Ped Grade Separated Cross 1.4 1.2 1.2 - -
Bus Stop Improvements 0.0 0.1 0.1 - -
Lincoln Avenue Bridge 0.4 0.3 0.3 - -
Pedestrian Sidewalk - ADA 0.0 0.1 0.1 - -
Transfort Bus Replacements - 0.5 0.5 - -
Willow Street Improvements - 0.6 0.6 - -
Year End Total $ 8.0 $ 12.7 $ 10.0 $ 2.7 $ -
Community Capital Improvement Plan - Year End 2018 - $12.7
• $3.4 is for future neighborhood parks
21
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Committed
Neighborhood Parks 9.6 10.1 6.7 3.4 -
Year End Total $ 9.7 $ 10.1 $ 6.7 $ 3.4 $ -
Neighborhood Parkland Fund - Year End 2018 - $10.1
• City has primarily used these monies for trails
22
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Parks, Rec & Open Space Capital Imp 3.0 2.3 1.1 1.2 -
Year End Total $ 3.0 $ 2.3 $ 1.1 $ 1.2 $ -
Conservation Trust Fund - Year End 2018 - $2.3
• Annual Revenue about $14.5 M.
• Major funding sources:
– About 60% comes from City quarter cent sales tax, expires at end of 2030
– About 34% comes from County Open Space tax, expires at end of 2043
• Revenue sharing to municipalities dropped from 58% to 50% beginning in 2019
23
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Natural Areas 14.7 16.7 10.5 6.2 -
Assigned
Prior Year Purchase Orders 0.2 0.8 0.8 - -
Capital Projects 1.9 1.1 1.1 - -
Year End Total $ 16.8 $ 18.6 $ 12.4 $ 6.2 $ -
Natural Areas Fund - Year End 2018 - $18.6
24
• Annual funding sources of $3.7 M
• Major funding sources:
– About 70% comes from fees and charges
– About 30% comes from general fund contribution
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Opera Donation 0.1 0.1 - 0.1 -
Committed
Art in Public Places 0.5 0.6 0.3 0.3 -
Assigned
Prior Year Purchase Orders - 0.3 0.3 - -
Cultural Services Surplus 2.0 1.2 0.7 - 0.5
Year End Total $ 2.6 $ 2.2 $ 1.3 $ 0.4 $ 0.5
Cultural Services & Facilities Fund - Year End 2018 - $2.2
25
• Annual funding sources of $7.2 M
• Major funding sources:
– About 90% comes from fees and charges
– About 10% comes from general fund contribution
• Note that Recreation programs are also supported by KFCG tax, but in the KFCG Fund
– Half of the parks and recreation allocation in 2018 was about $1.4 M
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned
Prior Year Purchase Orders - 0.1 0.1 - -
Recreation Programs - 0.3 - 0.3 -
Recreation Surplus 2.3 2.1 1.0 1.1 -
Year End Total $ 2.3 $ 2.5 $ 1.1 $ 1.4 $ -
Recreation Fund - Year End 2018 - $2.5
26
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned
Cemeteries Surplus 0.7 0.8 0.5 0.3 -
Year End Total $ 0.7 $ 0.8 $ 0.5 $ 0.3 $ -
Cemeteries Fund - Year End 2018 - $0.8
• To be used to maintain the cemeteries once on-going operations cease
27
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Perpetual Care 1.9 2.0 - 2.0 -
Year End Total $ 1.9 $ 2.0 $ - $ 2.0 $ -
Perpetual Care Fund - Year End 2018 - $2.0
28
• Annual funding sources of $900K
– 100% is general fund contributions.
– Fees at the museum belong to the non-profit partner, as outlined in IGA.
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned
Cultural Services Surplus 0.9 0.7 0.2 0.5 -
Year End Total $ 0.9 $ 0.7 $ 0.2 $ 0.5 $ -
Museum Fund - Year End 2018 - $0.7
29
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned
Transit Surplus(Deficit) 4.2 3.4 3.4 - -
Year End Total $ 4.2 $ 3.4 $ 3.4 $ - $ -
Transit Fund - Year End 2018 - $3.4
30
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Street Oversizing Surplus 18.5 15.6 - 15.6 -
Assigned
Capital Projects 3.9 3.6 3.6 - -
Prior Year Purchase Orders 0.1 - - - -
Budgeted use of reserves 2.6 5.7 5.7 - -
Year End Total $ 25.1 $ 24.9 $ 9.3 $ 15.6 $ -
Transportation CEF Fund - Year End 2018 - $24.9
• $5.2M may be reassigned but is intended to be used for Harmony Road improvements.
– Residual of the $13.5 million from State when ownership transferred to City
• $1.9M can be made available in future BFO cycles
31
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned
Prior Year Purchase Orders 0.3 0.5 0.5 - -
Capital Projects 1.4 1.6 1.6 - -
DT Parking - - - - -
Harmony Road 5.7 5.7 0.5 - 5.2
Transportation Surplus 8.0 6.8 4.9 - 1.9
Year End Total $ 15.4 $ 14.6 $ 7.5 $ - $ 7.1
Transportation Fund - Year End 2018 - $14.6
32
• No surplus available for future budget offers
• $1.0 M available for Civic Center Parking Structure as outlined in IGA with Larimer County – is
this IGA in effect still?
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
CC Parking Garage IGA 0.8 1.0 - 1.0 -
Assigned
Prior Year Purchase Orders - 0.1 0.1 - -
Capital Projects - - - - -
DT Parking 1.0 0.4 0.4 - -
Year End Total $ 1.8 $ 1.5 $ 0.5 $ 1.0 $ -
Parking Fund - Year End 2018 - $1.5
• Building on Basics (BOB) is expected to have $2.7M available for capital projects, after all
projects on the original ballot are completed
33
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Restricted
Building on Basics (BOB) 6.8 5.2 2.5 2.7 -
Misc. projects 2.5 1.3 1.3 - -
Donations and Grants 2.4 0.5 0.5 - -
Committed
General Fund Supported Projects 5.9 5.0 5.0 - -
Year End Total $ 17.6 $ 12.0 $ 9.3 $ 2.7 $ -
Capital Project Fund - Year End 2018 - $12.0
• City Council lowered the Policy Minimum to 12.5% from 25% in 2017
34
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 12.5% Operations $ 0.3 $ 0.3 $ 0.3 $ - $ -
Assigned
Available for Capital and Operations 0.1 0.4 - 0.4 -
Year End Total $ 0.4 $ 0.7 $ 0.3 $ 0.4 $ -
Golf Fund - Year End 2018 - $0.7
• Equipment Replacement – $800K is for replacement of vehicles and equipment for Police,
Forestry, Parks, Building Inspection, and Code Compliance
35
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 8.3% Operations $ 0.8 $ 0.8 $ 0.8 $ - $ -
Assigned
Prior Year Purchase Orders 0.1 0.1 0.1 - -
Reappropriation - 0.9 0.9 - -
Equipment surplus 1.1 1.8 - 1.8 -
Year End Total $ 2.0 $ 3.6 $ 1.8 $ 1.8 $ -
Equipment Fund - Year End 2018 - $3.6
• Loss fund reserves have declined significantly over the last 8 years and have begun to
rebound
36
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Minimum Policy - 25% Operations $ 1.2 $ 1.1 $ 1.1 $ - $ -
Committed
Self Insurance surplus 0.4 1.5 0.3 1.2 -
Assigned
Prior Year Purchase Orders - 0.1 0.1 - -
Year End Total $ 1.6 $ 2.7 $ 1.5 $ 1.2 $ -
Self Insurance Fund - Year End 2018 - $2.7
37
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned
Prior Year Purchase Orders 0.3 0.4 0.4 - -
Reappropriation - 0.1 0.1 - -
Budgeted Use of Reserves - 1.3 1.3 - -
Data & Communication Surplus 3.4 1.6 - - 1.6
Year End Total $ 3.7 $ 3.4 $ 1.8 $ - $ 1.6
Data and Communications Fund - Year End 2018 - $3.4
• After several years below policy minimums, the fund balance is now in compliance and has
established a surplus
38
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Policy minimum - 30% Operations $ 5.9 $ 6.8 $ 6.8 $ - $ -
Assigned
Budgeted Use of Reserves - 0.6 0.6 - -
Benefit Surplus 3.4 4.3 - 4.3 -
Year End Total $ 9.3 $ 11.7 $ 7.4 $ 4.3 $ -
Benefits Fund - Year End 2018 - $11.7
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Mike Beckstead, Chief Financial Officer
Lawrence Pollack, Budget Director
SUBJECT FOR DISCUSSION
2020 Budget Revision Recommendations
EXECUTIVE SUMMARY
The purpose of this agenda item is to familiarize and seek feedback from the Council Finance
Committee on the City Manager’s recommended revisions to the 2020 Budget before the
recommendations are reviewed and discussed at the Council Work Sessions scheduled for
September 10P
th
P and 24P
th
P. Based on direction from Council, the 2020 Budget Revisions will be
combined with the previously adopted 2019-20 Biennial Budget. The 2020 Annual Budget
Appropriation Ordinance is scheduled for 1P
st
P Reading on October 15 & 2P
nd
P Reading on November 5.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
- What questions or feedback does the Council Finance Committee have on the City Manager’s
recommended revisions to the 2020 Budget?
- Does the Council Finance Committee support moving forward with bringing the 2020 Budget
Revisions to the full City Council for the September 10P
th
P work session?
BACKGROUND/DISCUSSION
OVERVIEW:
The mid-cycle Revision Process is different from the biennial Budgeting for Outcomes (BFO)
process in that:
1) There is no broad request for new and innovative Offers. This is because we are
operating within the approved 2019-20 Biennial Budget and these revisions should be
exceptions based on information not known at the time the budget was adopted in 2018
2) Likewise, there is no review by BFO Teams or request for public engagement. However,
the Executive Leadership Team and City Manager conducted a comprehensive review to
determine which requests should be forwarded on for Council's consideration. Revised
revenue projections and available fund reserves were carefully considered when making
these recommendations.
The 2020 Budget Revisions include both 1) reductions to 2020 ongoing expenses to align them with
a decreased 2020 Sales Tax forecast and 2) additional Offers for Council’s consideration based on
information that wasn’t available at the time the 2019-20 Budget was adopted. The following are
key objectives which the 2020 Budget Revision recommendations are intended to address:
• Matching appropriations for ongoing expenditures to current ongoing revenue estimates
• Council priorities
• Fiduciary responsibilities & fund balance requirements
• High-priority projects and other needs not known at the time of the adoption of the 2019-20
Budget
The recommended 2020 Budget Revisions meet these goals. Recommended revisions to the 2020
Budget must also meet one of the following criteria:
• The request is specifically directed by the City Manager or City Council
• The request is related to a previously approved Offer where either revenue shortfalls or
unforeseen expenses are significantly impacting the delivery of that program or service
On a related note, at the July 23, 2019 City Council work session on the Climate Action Plan
update, some Councilmembers expressed interest in considering 2020 Midcycle Revision Offers
to support progress on the CAP goals. At the work session, staff noted they are continuing to
work on the 2018 community greenhouse gas inventory and forecast to 2020, in light of
improved new vehicle composition data staff received in July. By the end of August, staff will
be able to provide City Council with an update on the 2018 community carbon inventory and a
forecast for the 2020 goal.
The 2020 Mid-cycle Revision Offers developed by staff and brought forward by the Budget Lead
Team do not address specific CAP requests, in light of the limited scope of the midcycle revision
process and cautious approach regarding future revenue projections. However, once the future
greenhouse gas projections are clear, Council may request supplemental appropriations at any
time during the rest of 2019 and throughout 2020 necessary to help achieve the City’s 2020
Climate Action Plan goals.
REVENUE: Overall, most significant City revenues are coming in at, or above, the 2019
budget except for Sales Tax. Although total revenue for 2019 is on track to support 2019
expenses, the 2019 Sales Tax base, upon which 2020 growth is calculated, is now expected to be
lower than budget. Based on 2019 YTD sales tax growth of 1.8% and continued talk of a
possible recession, the growth of 2020 Sales Tax is now conservatively being estimated at 1.5%,
compared to 3.0% in the 2020 Budget.
Thus, it is necessary for the City to reduce ongoing expenses in 2020 to align with the reduced
forecast for 2020 Sales Tax revenue. The decreased forecast for Sales Tax revenue primarily
impacts the General Fund and Keep Fort Collins Great (KFCG) Fund; but also impacts the funds
associated with the three dedicated quarter-cent sales tax initiatives (Street maintenance, Natural
Areas and CCIP). The total reduction of anticipated revenue from Sales Tax in 2020 is about
$1.8M, with the General Fund portion being just under $1.1M.
ONGOING EXPENSE REDUCTIONS:
There are a few different opportunities to align ongoing expenses to the reduced revenue
projections. First, there was interest rate favorability associated with the debt offering for the
Police Regional Training Facility and the I-25/Prospect Interchange projects in the amount of
$350k in the General Fund. Second, there is ongoing fuel and maintenance savings within
Transfort which will reduce the contribution from the General Fund. Third, significant
underspend and rising reserve balances in the Benefits Fund allows for the ongoing expense
reduction to departments based on reduced contributions to the Benefits Fund. This third
opportunity equates to just over $1.2M savings in the General Fund.
Additionally, some funds had residual, unused ongoing revenue in 2020 that can be applied to
offset expenses. Lastly, 2018 fund balances are available in some funds to offset one-time
expenses. These changes to revenue and available reserves are summarized in the table below.
The Subtotal of Funding Changes line indicates that all Sales Tax shortfalls are covered and
indicates the amount of funding available by fund for the 2020 Revision Requests.
Summary of 2020 Revenue Changes and Available Reserves (values in $k)
The reserves and revenue above are available to fund the recommended additions to the 2020
Budget. The table below summarizes those proposed additions and Attachment #1 contains the
details of those recommended Offers.
Description
General
Fund -
Ongoing
General
Fund -
1-Time
Capital
Expan-
sion KFCG CCIP
Natural
Areas
Trans-
porta-
tion
Storm-
water
Self
Insur-
ance
Broad-
band TOTAL
Summary of Revenue Changes & Reserves
-
Reduced 2020 Sales Tax (ongoing) ($1,052) ($397) ($117) ($117) ($117) ($1,800)
-
Debt service favorability (ongoing) 350 350
-
Fuel Savings (ongoing) 206 206
-
Benefits Fund (ongoing) 1,244 1,244
-
Unused 2020 Ongoing Revenue 398 15 165 197 775
- Available Reserves (1-Time, if requested) 2,700 11,100 2,400 2,700 1,900 8,300 29,100
-
Less: 2019 Reappropriation (1-Time) (340) (28) (584) (952)
-
Less: 2019 Supplemental Approps (1-Time) (62) (20) (82)
Subtotal of Funding Changes 748 2,298 11,100 1,975 2,583 281 1,194 8,300 165 197 28,841
Summary of 2020 Recommended Additions:
After netting out the proposed additions fund balances are still strong and well above minimum
fund balance requirements.
Summary of Available Reserves and Revenue UafterU Recommended Additions (Values in
$k)
The 2020 Budget Revisions allow the City to align ongoing expenses with reduced revenue
forecasts from Sales Tax. Conversely, the City is also able to fund a small number of additions
to the 2020 Budget, which address Council priorities and other capital projects and design work
that benefit our community.
2020 Budget Revision Requests - BY FUNDING SOURCE
Fund Revision Requested FTE Ongoing $ One-Time $ Total
General Fund Developing Equity Gaps Analysis, Indicators, and Principles - - 120,000 120,000
East Mulberry Corridor Plan Update and Annexation Assessment - - 175,000 175,000
Park Improvement Project Support - - 50,000 50,000
Train Horn Noise - Federal Lobbying - - 42,000 42,000
Continued Voluntary Compliance Support for Outdoor Residential Wood Burning - 0.25 FTE 0.25 18,638 - 18,638
Chief Privacy Officer with Records Management Responsibility (start date of 1 Mar 2020) 1.00 93,750 17,962 111,712
Ongoing Agreements from 2018 Collective Bargaining 585,000 - 585,000
Sales Tax Technician - 1 FTE 1.00 50,585 - 50,585
Total General Fund 2.25 747,973 404,962 1,152,935
Capital Expansion New Block 32 Parking Structure Design - - 1,500,000 1,500,000
Fund Block 32 & 42 Plan Refresh - - 300,000 300,000
(General Government) Total Capital Expansion Fund - $0 $1,800,000 $1,800,000
Self Insurance Fund Security Specialist - 1.0 FTE (est. start date of 1 March 2020) 1.00 113,400 - 113,400
Total Self Insurance Fund 1.00 $113,400 $0 $113,400
Stormwater Fund Northeast College Corridor Outfall A4 (Lemay) Stormwater Lateral Design and Construction - - 959,500 959,500
Total Stormwater Fund - $0 $959,500 $959,500
Broadband Fund Income Qualified Connexion Credits 195,000 - 195,000
Total Broadband Fund - $195,000 $0 $195,000
TOTAL ALL FUNDS 3.25 1,056,373 3,164,462 4,220,835
Description
General
Fund -
Ongoing
General
Fund -
1-Time
Capital
Expan-
sion KFCG CCIP
Natural
Areas
Trans-
porta-
tion
Storm-
water
Self
Insur-
ance
Broad-
band TOTAL
Available Revenue and Reserves 748 2,298 11,100 1,975 2,583 281 1,194 8,300 165 197 28,841
2020 Budget Revision Requests
Ongoing Requests (748) (113) (195) (1,056)
One-Time Requests (405) (1,800) (960) (3,165)
Total of 2020 Revisions (748) (405) (1,800) 0 0 0 0 (960) (113) (195) (4,221)
Net Impact (positive = available) $0 $1,893 $9,300 $1,975 $2,583 $281 $1,194 $7,340 $52 $2
Attachment #1
Council Finance Committee
2020 Budget Revisions
‐Addition Offers
August 19, 2019
2020 Budget Revision Requests - BY FUNDING SOURCE
Page # Ongoing &
Fund of PDF Outcome Service Area Revision Requested FTE Ongoing $ One-Time $ One-Time
General Fund 1 NLSH Sustainability Services Developing Equity Gaps Analysis, Indicators, and Principles - - 120,000 120,000
2 NLSH Planning, Dev & Trans East Mulberry Corridor Plan Update and Annexation Assessment - - 175,000 175,000
3 C&R Community Services Park Improvement Project Support - - 50,000 50,000
4 ECON Executive Services Train Horn Noise - Federal Lobbying - - 42,000 42,000
5 ENV Sustainability Services Continued Voluntary Compliance Support for Outdoor Residential Wood Burning - 0.25 FTE 0.25 18,638 - 18,638
7 SAFE Info and Emp Services Chief Privacy Officer with Records Management Responsibility (start date of 1 Mar 2020) 1.00 93,750 17,962 111,712
11 SAFE Police Services Ongoing Agreements from 2018 Collective Bargaining 585,000 - 585,000
12 HPG Financial Services Sales Tax Technician - 1 FTE 1.00 50,585 - 50,585
Total General Fund 2.25 747,973 404,962 1,152,935
Capital Expansion 18 TRAN Info and Emp Services New Block 32 Parking Structure Design - - 1,500,000 1,500,000
Fund 19 HPG Info and Emp Services Block 32 & 42 Plan Refresh - - 300,000 300,000
(General Government) Total Capital Expansion Fund - $0 $1,800,000 $1,800,000
Self Insurance Fund 20 SAFE Financial Services Security Specialist - 1.0 FTE (est. start date of 1 March 2020) 1.00 113,400 - 113,400
Total Self Insurance Fund 1.00 $113,400 $0 $113,400
Stormwater Fund 22 SAFE Utility Services Northeast College Corridor Outfall A4 (Lemay) Stormwater Lateral Design and Construction - - 959,500 959,500
Total Stormwater Fund - $0 $959,500 $959,500
Broadband Fund 23 ECON Utility Services Income Qualified Connexion Credits 195,000 - 195,000
Total Broadband Fund - $195,000 $0 $195,000
TOTAL ALL FUNDS 3.25 1,056,373 3,164,462 4,220,835
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Neighborhood Livability & Social Health Contact:
Svc Area: Sustainability Services Related Offer #:
Department: Social Sustainability Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $120,000 $120,000
2) $0
$0 $120,000 $120,000
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: One-time Revenue $120,000 $120,000
2) $0
$0 $120,000 $120,000
NLSH 1.4 - Co-create a more inclusive and equitable community that promotes unity and honors
diversity
Developing Equity Gaps Analysis, Indicators, and Principles
Janet Freeman
Identifies internal and external inequities to inform areas of focus for the City of Fort Collins' equity
and inclusion work and develops in partnership with community a shared set of guiding principles.
NLSH 61. % of residents responding very good/good - Fort Collins as a place of community
NLSH 56. % of residents responding very good/good - Fort Collins as a place to live
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
This offer supports the City of Fort Collins’ efforts to co-create a more equitable, diverse, welcoming and inclusive community by
conducting a comprehensive gaps analysis and developing a data dashboard to inform and prioritize our ongoing work.
Data from City Plan’s Trends and Forces Report, our annual Community Survey, Poudre School District and other sources indicate there
are disparities in outcomes and experiences among residents. More data collection with external expertise is needed to fully understand
disparities in our community that can impact an individual or family’s ability to thrive. Indicators are social and economic inclusion; mental
and physical health; affordability; participation in City services, access to City infrastructure and more.
The City of Fort Collins is a member of the Government Alliance on Race and Equity (GARE), which provides technical assistance and
peer learning for cities. GARE’s best practice roadmap for cities recommends that in order to move the needle, cities must normalize,
organize and operationalize. A key first step is a comprehensive analysis of our community’s existing inequities and then ongoing
monitoring for data-informed, effective and responsive strategies developed and implemented with those who are impacted most. The
City is aligning its equity efforts to the promising practices of other jurisdictions working to advance equitable communities and could build
on the analysis conducted in places such as Grand Rapids, MI; St. Louis, MO; Pittsburgh, PA; Albuquerque, NM; Oakland CA; and
Dallas, TX. We will also leverage the regional coalition with Denver and Boulder.
Additionally, this offer supports community engagement to develop ‘principles of community,’ modeled after Colorado State University,
and a shared definition of equity and inclusion for Fort Collins.
Page 1 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Neighborhood Livability & Social Health Contact:
Svc Area: Planning, Dev & Transportation Related Offer #:
Department: Comm Dev & Neighborhood Svcs Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $175,000 $175,000
2) $0
$0 $175,000 $175,000
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: One-time Revenue $175,000 $175,000
2) $0
$0 $175,000 $175,000
The Corridor Plan will update the vision for the East Mulberry Area, establishing the framework for development and service provision
over the next 20-plus years. The annexation assessment component will address the short-term and long-term costs and revenues,
including taxes and fees, and one-time and on-going expenditures for municipal services and maintenance. An annexation phasing plan
will be developed that provides a fiscally responsible and logical transfer of service responsibility from the County to the City, includes
utilities services, and that also considers the impacts to area property owners. The offer includes external financial analysis consulting
services ($100k), transportation technical analysis consulting services ($25k), corridor electronic plan ($25k), public meeting support
($15k), plan printing ($2k), and project contingency ($8k).
NLSH 1.7 - Guide development through community planning, historic preservation, and efficient and
effective development review
East Mulberry Corridor Plan Update and Annexation Assessment
Cameron Gloss
The East Mulberry Corridor represents the City's biggest individual annexation opportunity, and an
area that can provide future land uses addressing the City's affordable housing, employment and
economic growth needs.
ECON 4. Net Percent Change in Local Jobs
SAFE 89. Part 1 Crimes in Fort Collins (per 1,000 population)
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
Page 2 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Culture & Recreation Contact:
Svc Area: Community Services Related Offer #: N/A
Department: Park Planning & Development Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $50,000 $50,000
2) $0
$0 $50,000 $50,000
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: Reserves $50,000 $50,000
2) $0
$0 $50,000 $50,000
C&R 2.2 - Plan, design, implement and maintain the City’s parks and trails systems
Park Improvement Project Support
Dawna Gorkowski
This offer directly relates to planning and design of new facilities in parks.
Performance Potential new measure - Donations leveraged
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
This offer will provide financial support for Park Planning staff to work on feasibility, design and community outreach for new features in
existing parks requested by the general public and private donors. Currently, Park Planning staff is funded through community and
neighborhood park impact fees. The fees are used to build new parks and cannot legally be used for improvement to existing parks. The
general public and private donors are requesting new features to existing parks. These requests need to be analyzed & vetted, and initial
designs may be requested by private donors before fundraising begins. Park Planning staff needs a funding source to charge staff time
and other ancillary costs associated with these requests. Current examples of these requests include an upgrade to Spring Canyon
Community Park veteran's plaza, 911 Memorial at Spring Park, park improvements to Eastside Park, and a cyclocross practice course at
Rossborough Park. This offer is requesting $50,000 one-time General Fund support for similar projects that may arise in 2020.
Page 3 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Economic Health Contact:
Svc Area: Executive Services Related Offer #: N/A
Department: City Manager's Office Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $42,000 $42,000
2) $0
$0 $42,000 $42,000
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: One-time Revenue $42,000 $42,000
2) $0
$0 $42,000 $42,000
This offer proposes to fund what will be the remaining 6 months of the federal lobbying contract with Squire Patton Boggs, who the City
began working with on train horn noise in July, 2019.
The City has been pursuing a reduction in train horn noise through the downtown core for many years, most notably in the form
of a quiet zone, which would allow train operators to refrain from blasting horns at every crossing. These efforts have been met with
resistance, challenges, and roadblocks from the Federal Railroad Administration (FRA), who has to date proven unwilling to work
collaboratively, or evaluate federal law beyond a very strict and narrow interpretation. The City has been denied a waiver to the
requirement for gates along the Mason corridor despite evidence of meeting safety criteria and has been unable to get firm next steps
from FRA on what might be alternative solutions that they would consider.
City Council and staff have worked with the federal government through multiple angles, including seeking support of appointed officials
from both the Obama and Trump administrations. These efforts have resulted in additional conversations with the FRA but have not
produced meaningful results. Recent visits to Washington, D.C. included conversations with our Congressional delegation and members
of the Trump administration indicating that a legislative approach could be the most expedient way to see relief. Continuing to use
professional lobbyists to assist in this effort increases our chances of getting legislation passed.
When we initially reached out to Squire Patton Boggs (SPB), they believed it could take up to a year to see progress. Funds appropriated
in 2019 were for the first seven months of that engagement. This request is for six additional months, because work did not begin with
SPB until July. If work needed to continue past June of 2020, an additional appropriation would be brought forward at that time.
ECON 3.8 - Secure a quiet zone along the Mason Corridor to reduce train
noise.
Train Horn Noise - Federal Lobbying
Tyler Marr
The City's work with a federal lobbyist on train horn noise is directly associated with achieving the
goal of the strategic objective.
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
Page 4 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Environmental Health Contact:
Svc Area: Sustainability Services Related Offer #: N/A
Department: Environmental Services Capital? No
Offer Description:
Continued Voluntary Compliance Support for Outdoor Residential Wood Burning - 0.25 FTE
Cassie Archuleta
Choose Primary Strategic
Objective:
Efforts to date have focused on promoting voluntary compliance, in line with Council feedback to increase education & outreach, avoiding
use of emergency resources when possible. In 2019, work related to new code adoption has included:
- Updated Fire Safety, Regulations and Nuisance printed materials, developed in collaboration with Poudre Fire Authority (PFA).
- Development of an Air Quality Index (AQI) awareness campaign, which includes health impact awareness, information about Air Quality
Alert days, and recommendations for pollution prevention actions such as avoiding wood burning fires.
- Development of tools and facilitation of events to assist with neighborhood conversations about wood burning and impacts, including
promotion of existing, free, neighborhood mediation resources (www.fcgov.com/neighborhoodservices/mediation).
- Increased awareness of, and access to, resources to file complaints (see https://www.fcgov.com/airquality/outdoorburning).
- Development of a robust air quality complaint intake system, to assist in gathering evidence regarding complaints.
- Collaboration and coordination with PFA regarding complaint response (e.g., PFA non-emergency response for active fires or potential
violations of Fire Code, and Environmental Compliance response for other nuisance concerns).
- Development of an internal implementation and enforcement plan.
Since adoption of this new code in 2019, with the addition of the 0.25 FTE in resources, staff has begun providing education and
outreach, tracking and responding to complaints, and otherwise mobilizing efforts to substantiate potential air quality nuisance violations.
This is in line with increasing roles and responsibilities for Environmental Services staff to support environmental compliance aspects of
air quality such as administering and responding to fugitive dust complaints, administering a Memorandum of Understanding with an
asphalt plant, and an oil and gas Operator’s Agreement.
Funding this offer continues the allocation for an additional 0.25 FTE in Environmental Services that was appropriated in 2019 to convert
an existing 0.75 FTE to a full 1.0 FTE to support education, outreach and compliance related to new air pollution nuisance code. The
issue of outdoor fire pits was originally identified as a Council Priority in 2017, and these efforts are aligned with the 2019 Council priority
related to impacts of fine particle pollution.
Modifications to Air Pollution Nuisance Code (Section 20-1) were adopted unanimously by Council on March 19, 2019 to help mitigate
nuisance and health impacts from outdoor wood burning fires in neighborhoods (Ordinance No. 042, 2019). Changes included
decriminalization of the code, a 10pm curfew, and a property line setback for outdoor wood burning devices. Additionally, Council
unanimously supported resources (0.25 FTE) to increase staffing support for compliance with the new code (Ordinance No. 043, 2019).
These new resources only extended through 2019, and ongoing ability to enforce the air pollution nuisance code modifications will, in
part, depend on continuation of these resources.
This offer supports ENV 4.2 by promoting voluntary compliance with air quality nuisance code related
to smoke from outdoor wood fires in residential areas.
Performance ENV 146. Outdoor Air Quality Index (AQI)
Measure(s):
How does Offer Support
Primary Strategic Objective:
ENV 4.2 - Improve indoor and outdoor
air quality
Page 5 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name: Continued Voluntary Compliance Support for Outdoor Residential Wood Burning - 0.25 FTE
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $18,638 $18,638
2) $0
$18,638 $0 $18,638
FTE (if part of the offer, identify the position and salary):
#
0.25 Salary $18,638
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: Ongoing $18,638 $18,638
2) $0
$18,638 $0 $18,638
Specialist, Evn Sustainability
Title
Page 6 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Safe Community Contact:
Svc Area: Executive Services Related Offer #: N/A
Department: City Clerk's Office Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $17,962 $17,962
2) $0
$0 $17,962 $17,962
FTE (if part of the offer, identify the position and salary):
#
1.00 Salary $93,750
Salary
Salary
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: Ongoing $93,750 $17,962 $111,712
2) $0
$93,750 $17,962 $111,712
SAFE 5.6 - Optimize the use of data and technology to improve service, protect mission-critical
infrastructure and enhance cybersecurity effectiveness
Chief Privacy Officer with Records Management Responsibilities
Delynn Coldiron
Cybersecurity and privacy are complementary. Both use technology, process, and people to protect
the City assets. In the case of privacy, the goal is specifically the protection of sensitive data. The
Privacy and Records Manager position would be responsible for the protection of citizen, employee,
and partner Personally Identifiable Information and other sensitive information throughout the City.
This role is necessary for the City's ability to comply with CO HB18-1128 "Concerning strengthening
protections for consumer data privacy" that went into effect September 1, 2018.
To be determined. Possibilities include whether or not we comply with CO privacy law and other
regulations, open data request turnaround time, customer satisfaction.
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
Please reference the attachment following the standard revision offer form.
Chief Privacy Office
Title
Page 7 of 23
This proposed 1.0 FTE Chief Privacy Officer position is designed to fulfill two complementary roles: a
Chief Privacy Officer (CPO) and a Certified Records Manager. While each role could easily be a full‐time
job by itself, we propose to roll the records manager responsibilities into the CPO position to gain
efficiencies in designing and managing processes that have both privacy and records considerations.
Colorado HB18‐1128 requires that the City understand and manage the personally identifiable
information (PII) it handles. Some drivers, in addition to HB18‐1128, include compliance with FCC
Customer Proprietary Network Information (CPNI) regulations pertaining to Connexion, the Federal Red
Flags Rule that applies to any entity that holds a transaction account belonging to a customer, Criminal
Justice Information (CJI) regulations, key findings of an external 2017 cybersecurity risk assessment, the
Baldridge initiative, general legal liability and financial risk associated with the possibility of a privacy
breach, as well as the ethical responsibility to protect our citizens’ identities and financial well‐being.
According to the Verizon 2018 Data Breach Investigations Report 11th Ed, the number of data breaches is
increasing approximately 25% per year. The IBM Ponemon 2018 Cost of Data Breach Study reports the
average cost per record of a data breach in the US to be $233. The same study cites a 28% chance of any
entity having a material breach within the next 24 months. Currently, the City has no overall
understanding or management of the PII that it collects, stores, and uses; nor does it have a privacy
policy, breach investigation and notification procedures, or a standard reliable process for helping to
ensure that PII shared with partners is secure. In short, the evolving threat and legislation landscapes
have created an environment where managing privacy for the City can no longer be left solely to
individual groups. It requires a strategy and oversight. Implementing and managing a privacy program
requires someone in a position of authority to develop strategy, coordinate among departments, and
manage the maturation of privacy protection.
Funding this offer will also improve records management activities across the City by creating a role
responsible for developing organization‐wide policy, providing oversight, standardizing document
control, and implementing standard procedures for managing and retrieving records. This is expected to
improve service efficiency and transparency for the public, minimize non‐value‐added processing time,
and help protect the City from legal issues related to non‐compliance violations.
Currently, there are multiple disparate approaches to records throughout the City organization. Many
departments use a common document management system to store documents; however, with no
organization‐wide policy, oversight or common approach there are areas of significant concern that
need to be addressed. Areas of concern include:
Concern Consequence
Storing information in multiple locations, including
non‐City approved apps and personal accounts.
Discovery and retrieval are complicated and time‐
consuming, if not impossible. The searching is a
waste of time and talent, and negatively affects
employee morale. The inability to discover
information creates a legal liability issue. The
unnecessarily long turnaround times are a
disservice to customers.
Page 8 of 23
Information is increasingly contained in
information systems, not as document images, yet
the City’s record management processes have not
evolved to meet the current environment.
The consequences of this are similar to those
above.
Inadequate policies or procedures for data
management: Data sharing agreements and open
records requests are not consistently reviewed for
privacy and cybersecurity safeguards.
Sensitive or confidential data is likely shared
without proper privacy and cybersecurity controls
in place, and we have no way of knowing. This
increases our risk of data breaches. Data breaches
are estimated to cost $233/record.
Outdated criteria, lack of awareness, and no well‐
defined process to determine what is considered
confidential information.
This results in documents being posted to City
Docs containing sensitive infrastructure
information that compromises City cyber and
physical security.
No centralized storage of important originals such
as contracts. For example, signatories often keep
contacts on their computer hard drives or personal
network drives.
The inability to find contracts in a timely manner
means they may not be effectively managed,
increasing financial and legal risk.
A lack of version control results in the use of
incorrect documents.
This increases financial and legal risk, as well as
causing rework throughout the City.
Duplicate documents are stored in multiple
locations without a way to know which copy is the
final approved record.
Not having a way to identify the official document
or information of record results in staff and citizen
confusion, rework, delays in filling record requests.
Lack of an overall records retention policy to guide
storage, destruction and archiving efforts.
Records kept longer than required are
discoverable and can result in higher than
necessary legal risk. Storing unnecessary files is
not free. The increasing growth in the amount of
stored information has caused IT to rework our
storage and back‐up strategies. If we don’t control
information storage, costs will continue to escalate
unnecessarily.
In summary, the City lacks an overall document control schema, records retention policy, data
classification process, data sharing approval process, open records release process, and general records
management. This results in:
Added costs from penalties for untimely records provision and wasted staff time throughout the
City
Negative hits to staff morale due to frustration and confusion and a sense of wasting time and
talent, which is known to cause job dissatisfaction and may result in health issues
Citizen dissatisfaction and a poor perception of the City, which may discourage citizens from
supporting local government
Increased financial risk
Increased legal liability
This offer provides an increased emphasis on government transparency, efficiency, and cost reduction
as expected by City leaders, staff, and citizens. It also aligns with the City’s Baldridge efforts and best
practices.
Additional Info:
A 2017 Cyber Security Risk Assessment prepared for Utilities identified key concerns with city‐
wide documentation control and privacy. Their records recommendations included adopting a
standardized documentation control policy that outlines documentation structure for programs,
policies and procedures. Consistency in approval process design, schemes, library locations and
communication process were also mentioned. Privacy‐wise, they recommended the inception of
a City privacy program to be led by a Chief Privacy Officer and a city‐wide data classification
plan.
City legal staff has expressed concern about the issues mentioned above, compliance with CO
HB18‐1128 specifically, and have indicated that there is risk to the City if records improvements
are not made and the requirements of the State legislation not complied with. The position in
this offer would be dedicated to both efforts and would require the chosen incumbent to have
professional document management certification and experience to enable immediate progress.
The current decentralized records approach has resulted in inconsistent or lack of
policies/practices from one department to another, independent or non‐existent retention
schedules and a lack of clarity on who owns and is responsible for existing records. There is also
a lack of clarity on what records exist and in what form they exist. This is problematic as
employees leave without knowledge transfer.
There is a continuous push for more transparency in government. The efforts continue to fine
success in the courts, including penalties assessed for organization who cannot provide records
in a timely fashion. The idea of transparency in government; however, has buoyed the notion
among employees and citizens that all government records are open, which is not the case. The
Colorado Open Records Act specifically excludes information from release that compromises the
security of the City, is not in the best interest of the community to release, or is otherwise
prohibited from release by federal or other state law. HB18‐1128 and federal regulations
establish requirements to protect PII from inappropriate disclosure, yet the City has no oversight
to help ensure we consistently interpret the CORA exclusions or comply with state and federal
legislation.
Page 10 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Safe Community Contact:
Svc Area: Police Services Related Offer #: Muliple 25.X offers
Department: Police Administration Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $585,000 $585,000
2) $0
$585,000 $0 $585,000
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: Ongoing $585,000 $585,000
2) $0
$585,000 $0 $585,000
The timing of the agreement to the term, conditions, and pay totals in the Collective Bargaining Unit were agreed to after the BFO
process was completed. This adjustment is the majority of the difference between what was budgeted through BFO and the updated
costs agreed to in the Collective Bargaining agreement.
SAFE 5.2 - Meet the expected level of core and specialized police services as the community grows
2018 Collective Bargaining Agreement Additional Ongoing Costs
Erik Martin
This will ensure that the City has sufficient funds budgeted to pay the negotiated pay for members of
the Collective Bargaining Unit
SAFE 23. Percentage of priority one response in 5.5 minutes or less.
SAFE 7. Average quarterly response time of priority one calls
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
Page 11 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Economic Health Contact:
Svc Area: Financial Services Related Offer #: 52.1
Department: Sales Tax Capital? No
Offer Description:
ECON 3.3 - Enhance business engagement to address existing and emerging business needs
Sales Tax Technician - 1 FTE
Jennifer Poznanovic
Adding a new Sales Tax Tech addresses a critical staffing need in the Sales Tax Dept. with customer
service, issuing licenses and processing tax. The current team of 2 has seen 115% growth in
business licenses since 1996 and a 51% increase in other licenses since 2011.
Performance ECON 70. Business Satisfaction (% rating positively)
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
This offer proposes to fund a 1.0 FTE Sales Tax Technician position in Financial Services. The licensing of businesses and processing of
sales and use tax returns are vital functions of a high performing government and an economically vital community. In addition to the
licensing of businesses, this position would assist in handling special events licenses, administering the sales tax delinquent program,
issuing short term rental licenses, handling the downtown concessionaire program, outdoor vendor licensing and issuing solicitor badges.
In 2018, annual revenue processed by the Sales Tax office was approximately $138M being remitted by approximately 12,500
businesses with over 54,000 sales tax returns processed by monthly, quarterly and annual filers. In addition to sales and use tax licenses,
the Sales Tax office also issues separate licenses for lodging, liquor occupation tax, short term rentals, tax exempt organizations, outdoor
vendors, second-hand dealers, solid waste collectors, solicitor permits, places of entertainment, special vending events, downtown
concessionaires, movie theaters, pawn brokers, auctioneers and carnival/circuses. In 2018, there were approximately 14,000 licenses
total.
This work is currently completed by one Senior Coordinator and one Sales Tax Technician. Total business license growth has increased
115% since 1996 while staffing has remained constant at 2 FTEs. As a result, two Sales Tax Auditors assist in the processing of these
returns to accommodate the lack of staff resources, resulting in an interruption to audit work. In addition to the increase in the number of
businesses being licensed and remitting taxes, these 2 staff took on additional duties of issuing short term rental licenses in 2017, issuing
solicitor permits and outdoor vendor licensing including mobile food trucks in 2013 – resulting in a 51% increase in other licenses. In order
to keep up with the volume of work, hourly staff is hired intermittently throughout the year in addition to the assistance Sales Tax Auditors
provide. The City Rebate program is also administered by the Sales Tax office with a temporary employee hired between the months of
June-November to assist in the processing of rebate applications. With the addition of this 1.0 FTE to the Sales Tax team, those
responsibilities for the City Rebate would be transferred to the Sales Tax Technician currently on staff, resulting in a savings of $20,000
to that on-going offer.
Compared to the largest cities in Colorado, Fort Collins has the leanest Sales Tax Department:
•Aurora: 17,800 licenses, 6.5 positions, 2,738 license per staff, 16.5 total staff
•Colorado Springs: 14,000 licenses, 5 positions, 2,800 licenses per staff, 8 total staff
•Fort Collins: 12,500 licenses, 2 positions, 6,250 licenses per staff, 5 total staff
•Boulder: 11,200 licenses, 4 positions, 2,800 licenses per staff, 9 total staff
•Lakewood: 10,400 licenses, 3.5 positions, 2,971 licenses per staff, 12.5 total staff
•Arvada: 6,500 licenses, 2 positions per staff, 3,250 licenses per staff, 7 total staff
•Westminster: 6,400 licenses, 2 positions, 3,200 licenses per staff, 8 total staff
•Thornton: 6,100 licenses, 2 positions, 3,050 licenses per staff, 9 total staff
Please reference the attachment following the standard revision offer form for further supporting material.
Page 12 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name: Sales Tax Technician - 1 FTE
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $70,585 $70,585
2) $0
$70,585 $0 $70,585
FTE (if part of the offer, identify the position and salary):
#
1.00 Salary $70,585
Salary
Salary
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: Ongoing $70,585 $70,585
2) $0
$70,585 $0 $70,585
2020 OFFER(s) to be reduced or eliminated, if applicable:
Offer # Offer Title Ongoing One-Time Total
53.1 Low Income, Property and Utility Rebate
Programs
20,000 20,000
Funding Source(s) 100-General Fund: Ongoing 20,000 20,000
Impact:
$50,585 net, accounting for a $20,000 savings in Ongoing Offer 53.1 - Low Income, Property & Utility Rebate Programs
Tech, Sales Tax Audit & Revenue
Title
Page 13 of 23
2020 Revision Offer – Sales Tax Tech
- Offer Name (Required): New Sales Tax Tech
- Owner (Required): Jennifer Poznanovic
- Offer Summary:
This offer proposes to fund a 1.0 FTE Sales Tax Technician position in the Financial Services. The
licensing of businesses and processing of sales and use tax returns are vital functions of a high
performing government and an economically vital community. In addition to the licensing of
businesses, this position would assist in handling special events licenses, administering the sales
tax delinquent program, issuing short term rental licenses, handling the downtown
concessionaire program, outdoor vendor licensing and issuing solicitor badges.
In 2018, annual revenue processed by the Sales Tax office was approximately $138M being
remitted by approximately 12,500 businesses with over 54,000 sales tax returns processed by
monthly, quarterly and annual filers. In addition to sales and use tax licenses, the Sales Tax office
also issues separate licenses for lodging, liquor occupation tax, short term rentals, tax exempt
organizations, outdoor vendors, second‐hand dealers, solid waste collectors, solicitor permits,
places of entertainment, special vending events, downtown concessionaires, movie theaters,
pawn brokers, auctioneers and carnival/circuses. In 2018, there were approximately 14,000
licenses total.
License Type
2018 License
Count
Other
Department
1 Sales Tax 12,565 PDT, City Clerk
2 Lodging 420 No
3 Liquor Occupation Tax 400 City Clerk
4 Short Term Rental 381 PDT
5 Tax Exempt 268 No
6 Outdoor Vendor 50 PDT
7 Secondhand Dealer 24 Police
8 Solid Waste Collector 22 Sustainability
9 Solicitor Permit 18 Police
10 Places of Entertainment 17 No
11 Special Vending Event 9 PDT
12 Downtown Concessionaire 8 Purchasing
13 Movie Theater 6 No
14 Pawn Broker 5 Police
15 Auctioneer 5 No
16 Carnival, Circus 0 City Manager
Page 14 of 23
This work is currently completed by one Senior Coordinator and one Sales Tax Technician. Total
business license growth has increased 115% since 1996 while staffing has remained constant at 2
FTEs. As a result, two Sales Tax Auditors assist in the processing of these returns to
accommodate the lack of staff resources, resulting in an interruption to audit work.
In addition to the increase in the number of businesses being licensed and remitting taxes, these
two staff took on additional duties of issuing short term rental licenses in 2017, issuing solicitor
permits and outdoor vendor licensing including mobile food trucks in 2013 – resulting in a 51%
increase in other licenses. In order to keep up with the volume of work, hourly staff is hired
intermittently throughout the year in addition to the assistance Sales Tax Auditors provide.
Page 15 of 23
Compared to the largest cities in Colorado, Fort Collins has the leanest Sales Tax Department:
Front Range City Comparison:
City # of Sales
Tax Licenses
Licensing
Positions
Licenses/
Licensing
Staff
Total
Staff
Aurora 17,800 6.5 2,738 16.5
Colorado Springs 14,000 5 2,800 8
Fort Collins 12,500 2 6,250 5
Boulder 11,200 4 2,800 9
Lakewood 10,400 3.5 2,971 12.5
Arvada 6,500 2 3,250 7
Westminster 6,400 2 3,200 8
Thornton 6,100 2 3,050 9
Page 16 of 23
The City Rebate program is also administered out of the Sales Tax office with a temporary
employee hired between the months of June‐November to assist in the processing of rebate
applications. With the addition of this 1.0 FTE to the Sales Tax team, those responsibilities for
the City Rebate would be transferred to the Sales Tax Technician currently on staff, resulting in a
savings of $20,000 to that on‐going offer.
Cost of new resource:
- Primary Strategic Objective:
ECON 3.3 ‐ Enhance business engagement to address existing and emerging business needs
- Performance Measures:
ECON 70. Business Satisfaction (% rating positively)
- Enhancement/Reduction Base Offer (Required):
$50,585 net, accounting for a $20,000 savings in on‐going offer "Low Income, Property &
Utility Rebate Programs"
$70K with benefits
$20K from rebate program
$50K needed for new FTE
$18K from STR revenue
$32K from GF
Page 17 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: High Performing Govt. Contact:
Svc Area: Information & Employee Svcs Related Offer #:
Department: Operation Services Capital? Yes
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 400 - Capital Projects Fund $1,500,000 $1,500,000
2) $0
$0 $1,500,000 $1,500,000
Ongoing One-Time Total
Funding Source(s): 1) 250-Capital Expansion Fund: General Government $1,500,000 $1,500,000
2) $0
$0 $1,500,000 $1,500,000
Performance
Measure(s):
This offer will fund the design of a new Downtown parking structure. The Downtown area needs
additional parking, particularity in the area where the City and County offices are located. This new four-level
garage is planned for 245 N. Mason St., and would replace the surface parking just north of the 215 N.
Mason St. facility.
The new 400-space parking structure (replacing 69 spots) would have one level below ground, which would contain
mechanical equipment and parking stalls for City Fleet vehicles. The remaining three levels would
allow parking for both the public and City staff working in the Downtown area. It will include a solar
photo-voltaic (PV) system on the top level to off-set the building’s energy use, and may also include
some retail space to be leased. This project timing would need to be completed before, or in conjunction with the new Municipal
Building construction.
Before the design begins, we anticipate having conversations with Larimer County to determine their interest in a partnership.
The desired schedule would be:
2020 – 100% Design completed with cost estimate and construction drawings
2021 - Budget offer submitted out-lining funding plan
2022/ 2023 - Construction complete
New Block 32 Parking Structure Design
Tracy Ochsner
Choose Primary Strategic
Objective:
TRAN 6.7 - Address parking needs Downtown, along the MAX corridor and in residential
neighborhoods
How does Offer Support
Primary Strategic Objective:
Address parking needs Downtown, along the MAX corridor and in residential
neighborhoods: This parking structure would drastically improve downtown and surrounding
neighborhood parking problems for now and the future.
Page 18 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: High Performing Govt. Contact:
Svc Area: Information & Employee Svcs Related Offer #:
Department: Operation Services Capital? Yes
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 250 - Capital Expansion Fund $300,000 $300,000
2) $0
$0 $300,000 $300,000
Ongoing One-Time Total
Funding Source(s): 1) 250-Capital Expansion Fund: General Government $300,000 $300,000
2) $0
$0 $300,000 $300,000
Block 32 & 42 Plan Refresh
Tracy Ochsner
Choose Primary Strategic
Objective: HPG 7.1 - Provide world-class municipal services to residents and businesses
How does Offer Support
Primary Strategic Objective:
A new City Municipal Building will house 11 different City departments and a Council Chambers to
provide many functions and services.
Performance
Measure(s):
This offer will fund a master and space plan refresh for the proposed Block 32 and 42 Municipal campus that was drafted in 2013-2014.
This plan includes a new City Municipal Building, parking structure(s), and outdoor event space. The refresh will include the site plan for
Block 32 and 42, and update the space plans to determine each affected department space needs and anticipated growth over the next
10-12 years. This effort will assist in determining which departments to house in 215 N Mason, 300 Laporte Ave, Building A, and the new
City Municipal Building. The size of this new facility will then be determined, and a conceptual design will be completed. This refresh
must be done in order to know the required square footage and overall site layout prior to the design moving forward.
The desired schedule for this project would be:
2020 - Refresh the Block 32 and 42 master plan and complete renderings
2021 - 50% building design complete and develop a cost estimate
2022 - 100% building design complete including construction drawings
2023 - Develop funding plan for 2024 / 2025 Budget
2024/ 2025 - New Municipal Building construction,
2026- Project complete
Page 19 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Safe Community Contact:
Svc Area: Financial Services Related Offer #: 71.7
Department: SSRM and OEM Capital? No
Offer Description:
The Security Specialist will conduct on-site security assessments to identify vulnerabilities, coordinate City-wide physical security systems
(to include video surveillance and access control), and assist in developing and facilitating security and emergency preparedness related
training. The position will also be responsible for helping departments coordinate consistent security-related practices and policies across
the organization, working to develop mission enhancing practices and shared resources. Duties will include but are not limited to the
following:
•Conducting on-site security assessments to identify vulnerabilities and working with internal and external stakeholders to implement
effective security strategies.
•Coordinating with City partners to effectively manage City-wide physical security systems, to include video surveillance, access control
systems, intrusion detection systems, and panic buttons to safeguard life and property.
•Managing the acquisition and ongoing contract performance of security vendors.
•Ensuring an effective workplace violence prevention program by providing consultation and resources to the Human Resources
department in handling sensitive employee matters.
•Coordinating internal investigations of security violations, employee wrongdoing, theft, and other misconduct.
•Responding to security incidents impacting the City and working closely and in coordination with all internal and external stakeholders to
identify vulnerabilities and implement corrective actions to resolve security-related issues.
•Fostering a greater situational awareness, preparedness, and resiliency within the City.
SAFE 5.8 - Improve security at City facilities and properties
Security Specialist - 1.0 FTE
Kendra Radford and Jim Byrne
Providing for a safe and secure workplace is a core responsibility and value for the City. Funding this
offer provides budget for a Security Specialist position that will serve as a coordinator for
programming related to the protection and safety of employees, physical assets, operational
capabilities, and the environment against potential threats of injury and loss or damage by criminal,
hostile, or malicious acts.
All City Departments have relevant security related training developed and provided, with 100% of
City employees participating.
All security related incidents will be tracked and reviewed for causes and improvements, with the goal
of reducing both the number of incidents and the severity of impact to employees and the
organization.
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
Page 20 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name: Security Specialist - 1.0 FTE
Ongoing One-Time Total
Expense Fund(s): 1) 602 - Self Insurance Fund $113,400 $113,400
2) $0
$113,400 $0 $113,400
FTE (if part of the offer, identify the position and salary):
#
1.00 Salary $113,400
Ongoing One-Time Total
Funding Source(s): 1) 602-Self Insurance Fund: Ongoing Revenue $113,400 $113,400
2) $0
$113,400 $0 $113,400
Security Specialist
Title
Page 21 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: SAFE Community Contact:
Svc Area: Utility Services Related Offer #:
Department: Ut Water Systems Engr Div Capital? Yes
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 504 - Stormwater Fund $959,500 $959,500
2) $0
$0 $959,500 $959,500
Ongoing One-Time Total
Funding Source(s): 1) 504-Stormwater Fund: Reserves $959,500 $959,500
2) $0
$0 $959,500 $959,500
SAFE 5.5 - Address water, wastewater and stormwater infrastructure needs for the protection of
people, property and the environment
Northeast College Corridor Outfall A4 (Lemay) Stormwater Lateral Design and Construction
Theresa Connor
Construction of needed stormwater infrastructure that has been identified in a Master Plan to provide
flood protection for the community.
SAFE 69. System Improvement (LF of Pipe Improved) (Stormwater)
SAFE 88. % completion of Master Plan needs for Stormwater projects
Performance
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
The Northeast College Corridor Outfall (NECCO) is a stormwater improvement program to address stormwater flooding and a lack of
stormwater infrastructure in the Dry Creek Basin in the area north of Vine Drive and east of College Avenue. The A4 Lateral is one
branch of this system located along Old Lemay Drive north of Vine. It collects and conveys stormwater runoff from the Evergreen and
Greenbriar subdivisions and will eliminate the need for an existing stormwater pump station that is nearly failing and requires substantial
maintenance. The A4 lateral will improve the stormwater system for current residents in these neighborhoods. The reason for a mid-cycle
offer is to align with Planning, Development and Transportation (PDT) Department's horizontal work on the realigned Lemay Avenue
overpass. Coordination with the roadway project will help manage project costs and provide an opportunity to coordinate construction of
the stormwater system for the roadway with the NECCO system. An easement will be needed from Two Tree Horse Farms along the old
alignment of Lemay Avenue. The landowner is willing to donate the easement if constructed in coordination with the realigned Lemay
Avenue Overpass and dedication of an easement to them along the NECCO channel downstream. The opportunity to get this work
completed is advantageous for multiple parties and replaces failing infrastructure. There is no net increase in on-going operations and
maintenance costs as the new stormwater pipe will eliminate a failing pump station and its associated costs.
Page 22 of 23
City of Fort Collins
2020 Revision - Offer Request/Reduction Form
Offer Name:
Outcome: Neighborhood Livability & Social Health Contact:
Svc Area: Utility Services Related Offer #: 85.1
Department: Broadband (Utilities) Capital? No
Offer Description:
Ongoing One-Time Total
Expense Fund(s): 1) 100 - General Fund $195,000 $195,000
2) $0
$195,000 $0 $195,000
Ongoing One-Time Total
Funding Source(s): 1) 100-General Fund: Ongoing $195,000 $195,000
2) $0
$195,000 $0 $195,000
An income-qualified credit will be available to Fort Collins' residents as Connexion comes online 2019 and 2020. Eligibility will mirror
existing income-qualified metrics currently utilized by Utilities: LEAP qualified in current or previous year; LEAP eligibility is up to 165% of
federal poverty index; A broadband "credit" allows income-qualified households to choose a service plan from the full Connexion menu
versus most commercial models where reduced rates deliver reduced speed; 2019/20 availability of an income-qualified rate is restricted
by unknowns embedded in the launch: service area coverage and flow of pilot revenue.
Staff will bring forward a comprehensive income-qualified broadband program to reduce digital distress and increase equitable access in
spring 2020 BFO for 2021/22 implementation. This robust Connexion income-qualified program could include, but will not be limited to:
educational outreach, community partnerships, marketing and engagement, digital skill training and development, evaluation of
outcomes, and success metrics.
NLSH 1.3 - Improve accessibility to City and community programs and services to low- and moderate-
income populations
Income Qualified Connexion Credit
Colman Keane
An income-qualified rate will provide low-income individuals and families equitable access to
broadband services
Performance In development
Measure(s):
How does Offer Support
Primary Strategic Objective:
Choose Primary Strategic
Objective:
Page 23 of 23
1
2020 Budget Revisions
Council Finance Committee - August 19, 2019
Today’s Agenda
2
1) Budget Revision Process Overview
2) 2020 Financial Context
• Revenue forecast
• Expenditure adjustments
• Funding available
3) Review of 2020 Revision Offer requests
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Even Years Odd Years
I
nputs for the Strategic Plan
Biennial Strategic Plan & Budget Calendar
Offer
Creation
BFO Teams
Evaluate Offers
Public Engagement
BLT Exec
Review
Budget
Prep Council Process
Capital Improvement Plan
Strategic Risk Assessment
LT Financial Plan
Community Engagement
/ Community Survey
Dept. Input
Strategic Plan
X
X = Council review and adoption of the Strategic Plan
BFO ‘Off Year’ Revision Process
Results
Review
Strategic Plan
Council
Election &
Planning
Retreat
3
X
Strategic Planning Process Budgeting for Outcomes
Revenue Public Hearings
2020 Budget Revision Objectives
4
The recommended 2020 Budget Revisions are intended to address:
• Adjust ongoing expenditures to match current ongoing revenue estimates
• Council priorities and high-priority projects and needs not known during last BFO
• Fiduciary responsibilities & fund balance
Criteria for New Requests:
1.The request is specifically directed by the City Manager or City Council
2.The request is related to a previously approved Offer where either unanticipated
revenue shortfalls or unforeseen expenses are significantly impacting the delivery of
that program or service. These also need to be approved by the City Manager.
The Budget Revision process it not Budgeting for Outcomes:
• There is no ‘call for Offers’ to support the Strategic Plan
• There is no vetting and comparison of Offers by BFO Teams
Timeline for the 2020 Budget Revisions
19 Aug: Council Finance Committee meeting
10 Sept: Council Work Session #1
24 Sept: Council Work Session #2 (requested by Council last cycle)
15 Oct: 1st
Reading of the 2020 Annual Appropriation
5 Nov: 2nd
Reading
5
Cost Assumptions in the 2019-20 Budget
6
2019 2020
General Inflation 2.3% 2.3%
Salary Adjustments 3.0% 3.0%
Medical and Dental Costs 10.2% 11.4%
Fuel Prices $2.51 $2.71 / gallon
Retirement 403/457 Contributions No Change
GERP Supplemental Contribution* $1.1M $1.1m + $0.5m
Budget Staffing at 98% of Total Cost
To Account for Market Swings, Staff Proposes to make a General Fund Assignment for a
Possible Additional Contribution of $500k to the General Employees Retirement Plan (GERP)
7
No Changes to the Utility Rates Included in the 2019-20 Adopted Budget
Rate Changes:
Actual Actual Budget Budget
Utility 2017 2018 2019 2020
L&P 3.45% 1.8% 5.0% 5.0%
Water 5.0% 5.0% 0.0% 0.0%
Wastewater 3.0% 3.0% 0.0% 0.0%
Stormwater 5.0% 0.0% 2.0% 2.0%
Utility Rate Assumptions in the 2019-20 Budget
2019 High-Level Financial Summary
8
Governmental Funds
• Revenue:
− 2019 budget included 3% sales tax growth – strong 2018 modified to 1.7%
− YTD net Sales Tax growth is 1.8%
− Other major revenue streams – no concerns
• Expenses:
− Underspend YTD – no concerns
Enterprise Funds
• No concerns with either revenue or expenses through July 2019
2019-20 Sales Tax Update
9
• Sales Tax Growth:
− 2019 growth of 1.8%
− 2017 & 2018 growth 2.3% and 3.3%
− 2020 growth forecast at 3.0%
− Uncertainty on achieving 3.0% in 2020
• Modified 2020 Sales Tax Forecast
− Modified forecast – 1.5%
• Conservative approach
− Sales Tax revenue reduction of $1.8M
− Requires expenditure adjustments of ongoing
expenditures
Fund Shortfall
General Fund $1,052
Keep Fort Collins Great 397
Natural Areas 117
Transportation 117
CCIP 117
$1,800
10
General Fund 2018
Year-end Fund Balance
Budgeted Recession
Contingency
remains at $2.2M
2017 2018
Appropriated,
Min. Policy, or
Scheduled
Available but
with some
Constraints
Available for
Nearly Any
Purpose
Assigned - Minimum 60 day Policy $ 25.3 $ 26.0 $ 26.0 $ - $ -
Non-spendable
Advances 4.9 4.7 4.7 - -
Landbank inventory 1.5 1.5 1.5 - -
Udall Endowment 0.1 0.1 0.1
Restricted
TABOR Emergency 6.9 7.0 7.0 - -
Police Programs 0.9 0.3 0.2 0.1 -
Donations & Misc 0.9 1.2 0.8 0.4 -
Economic Rebates 2.6 1.7 0.4 1.3 -
DDA/Woodward Debt 0.7 0.7 - 0.7 -
Committed
Traffic Calming - 0.2 - 0.2 -
Culture & Recreation 0.2 0.4 0.3 0.1 -
Affordable Housing Land Bank 1.3 1.4 - 1.4 -
Assigned
Prior Year Purchase Orders 4.3 3.7 3.7 - -
Manufacturing Use Tax Rebate 0.7 1.2 1.2 - -
Transit Bus Replacement 0.5 0.5 0.2 - 0.3
Golf Irrigation System 0.5 0.5 0.1 - 0.4
Revenue Contingency 4.4 2.2 - - 2.2
Camera Radar 0.9 1.1 - - 1.1
Waste Innovation 0.2 0.2 - - 0.2
Reappropriation 1.0 0.3 0.3 - -
Budgeted use of reserves 7.3 8.7 8.7 - -
Unassigned 4.8 2.7 - - 2.7
Year End Total $ 69.9 $ 66.3 $ 55.2 $ 4.2 $ 6.9
General Fund - Year End 2018 - $66.3
How We Closed the Gap
11
1. Reduced Debt Service Due to Interest Rate Favorability
‒ Lower interest on 2019 debt resulted in $350k debt service favorability
• Impact: Ongoing savings of $350k in the General Fund starting in 2019
2. Fuel Savings in Transfort
‒ 2019 YTD fuel savings of being driven by usage of CNG and diesel fuel lower than forecast
‒ Adjustment to 2020 of $206k – modified GF transfer to Transit
• Impact: Ongoing savings of $206k in the General Fund
3. Benefits – Lower Claims & High Available Fund Balance
‒ Claims cost $2.9M under forecast, benefits fund $4.3M higher than minimum
‒ Hold flat department or staff premiums – avoid 7.5% and 5.0% increase
• Impact: Reduction across all departments approximately $3.0M with about $1.25M in
the General Fund
Closing the Gap & Available Funding
12
Expenditure Adjustments in Total Balance Expenditures with Revenue
Description
General
Fund -
Ongoing
General
Fund -
1-Time
Capital
Expan-
sion KFCG CCIP
Natural
Areas
Trans-
porta-
tion
Storm-
water
Self
Insur-
ance
Broad-
band TOTAL
Summary of Revenue Changes & Reserves
-
Reduced 2020 Sales Tax (ongoing) ($1,052) ($397) ($117) ($117) ($117) ($1,800)
-
Debt service favorability (ongoing) 350 350
-
Fuel Savings (ongoing) 206 206
-
Benefits Fund (ongoing) 1,244 1,244
-
Unused 2020 Ongoing Revenue 398 15 165 197 775
- Available Reserves (1-Time, if requested) 2,700 11,100 2,400 2,700 1,900 8,300 29,100
-
Less: 2019 Reappropriation (1-Time) (340) (28) (584) (952)
-
Less: 2019 Supplemental Approps (1-Time) (62) (20) (82)
Subtotal of Funding Changes 748 2,298 11,100 1,975 2,583 281 1,194 8,300 165 197 28,841
All values in $k
2020 Budget Revision Offers
13
Ongoing &
Fund Revision Requested FTE Ongoing $ One-Time $ One-Time
General Fund Developing Equity Gaps Analysis, Indicators, and Principles - - 120,000 120,000
East Mulberry Corridor Plan Update and Annexation Assessment - - 175,000 175,000
Park Improvement Project Support - - 50,000 50,000
Train Horn Noise - Federal Lobbying - - 42,000 42,000
Continued Voluntary Compliance Support for Outdoor Residential Wood Burning - 0.25 FTE 0.25 18,638 - 18,638
Chief Privacy Officer with Records Management Responsibility (start date of 1 Mar 2020) 1.00 93,750 17,962 111,712
Ongoing Agreements from 2018 Collective Bargaining 585,000 - 585,000
Sales Tax Technician - 1 FTE 1.00 50,585 - 50,585
Total General Fund 2.25 747,973 404,962 1,152,935
Capital Expansion Fund New Block 32 Parking Structure Design - - 1,500,000 1,500,000
(General Government) Block 32 & 42 Plan Refresh - - 300,000 300,000
Total Capital Expansion Fund - $0 $1,800,000 $1,800,000
Self Insurance Fund Security Specialist - 1.0 FTE (est. start date of 1 March 2020) 1.00 113,400 - 113,400
Total Self Insurance Fund 1.00 $113,400 $0 $113,400
Stormwater Fund Northeast College Corridor Outfall A4 (Lemay) Stormwater Lateral Design and Construction - - 959,500 959,500
Total Stormwater Fund - $0 $959,500 $959,500
Broadband Fund Income Qualified Connexion Credits 195,000 - 195,000
Total Broadband Fund - $195,000 $0 $195,000
TOTAL ALL FUNDS 3.25 1,056,373 3,164,462 4,220,835
Summary of Proposed Changes
14
Combination of expense reductions, available reserves and ongoing revenue
offset Sales Tax shortfall and provides funding for proposed 2020 Revisions
All values in $k
Description
General
Fund -
Ongoing
General
Fund -
1-Time
Capital
Expan-
sion KFCG CCIP
Natural
Areas
Trans-
porta-
tion
Storm-
water
Self
Insur-
ance
Broad-
band TOTAL
Available Revenue and Reserves 748 2,298 11,100 1,975 2,583 281 1,194 8,300 165 197 28,841
2020 Budget Revision Requests
Ongoing Requests (748) (113) (195) (1,056)
One-Time Requests (405) (1,800) (960) (3,165)
Total of 2020 Revisions (748) (405) (1,800) 0 0 0 0 (960) (113) (195) (4,221)
Net Impact (positive = available) $0 $1,893 $9,300 $1,975 $2,583 $281 $1,194 $7,340 $52 $2
15
Guidance Requested:
1. What questions or feedback does the Council Finance Committee have on
the City Manager’s recommended revisions to the 2020 Budget?
2. Does the Council Finance Committee support moving forward with bringing
the 2020 Budget Revisions to the full City Council for the September 10th
work session?
16
Back-Up
Sales Tax with % Change
17
• Sales tax is generated at point of
purchase of goods and products
• Average growth:
• 2000 - 2010 1.7%
• 2010 – 2015 5.6% (w/o KFCG)
• 2015 - 2018 3.0%
• 2019 YTD growth over 2018 1.7%
Use Tax with % Change
18
• Use Tax generated from building
activity, auto sales and business
equipment investment
• Significant volatility in use tax
• Several large projects drove the
spike in 2014-2016
• Current building activity has
revenue hovering in the $21M
range
City Fund Balances
19
• Strong fund balance
growth 2011- 2014
• Stable & healthy fund
balance 2014 – 2018
• Fund balance as a %
of expenses peaked
in 2014, healthy in
2018
General Fund Balances
20
• Strong fund balance
growth 2011- 2014
• Stable & healthy fund
balance 2014 – 2018
• Minimum reserves
grown from $20.6M
in 2011 to $33.0M in
2018
Prior BFO Reductions Summary
21
2018 Revisions
- Reduced ongoing expenses by $2.3M Citywide; $1.9M realized within the
General Fund
- Various reductions were across entire City, excluding Utilities
2019-20 Biennial Budget
- $2.4M of ongoing expenses reduced in the City Manager’s Recommended
Budget comprised of position reductions, program reductions/eliminations and
other operational reductions
- $1.3M of additional ongoing expenses reduced on 1st
Reading based on Council
direction
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff:
Jennifer Poznanovic
Lance Smith
Date: August 19, 2019
SUBJECT FOR DISCUSSION
Comprehensive 2019 Fee Update
EXECUTIVE SUMMARY
Coordination of Council approved fees began in 2016 to provide a more holistic view of the total
cost impact. Previously, fee updates were presented to Council on an individual basis. After the
2019 fee update, fee phasing will be complete with regular two and four-year cadence updates
beginning in 2021.
2019 fee updates include: Electric Capacity fees, Water Supply Requirement fees, Wet Utility
Plan Investment Fees and Step III of the 2017 Capital Expansion Fees.
Staff proposes the following fee changes:
• Wet Utility PIFs as proposed
• Electric Capacity Fees as proposed
• Water Supply Requirement Fee as proposed
• 100% of proposed 2017 Capital Expansion Fees (Step III)
• Transportation Capital Expansion Fees (inflation only)
Development Review Fees were initially planned to be part of the 2019 update but have been
decoupled and will come forward at a later date.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council Finance Committee support the following proposed next steps?
• October 8P
th
P: Council Work Session
• November 5P
th
P & 19P
th
P: Ordinance readings subject to Council direction
• 2021 updates effective January 2022
BACKGROUND/DISCUSSION
Since the fall of October 2016, staff has worked to coordinate the process for updating all new
development related fees that require Council approval. Development related fees that are
approved by Council are six Capital Expansion Fees, five Utility Fees and Building
Development Fees.
Previously, fee updates were presented to Council on an individual basis. However, it was
determined that updates should occur on a regular two and four-year cadence and fees updates
should occur together each year to provide a more holistic view of the impact of any fee
increases.
Impact fee coordination includes a detailed fee study analysis for Capital Expansion Fees
(CEFs), Transportation Capital Expansion Fees (TCEFs) and Development Review Fees every
four years. This requires an outside consultant through a request for proposal (RFP) process
where data is provided by City staff. Findings by the consultant are also verified by City staff.
For Utility Fees, a detailed fee study is planned every two years. These are internal updates by
City staff with periodic consultant verification. In the future, impact fee study analysis will be
targeted in the odd year before Budgeting for Outcomes (BFO). In years without an update, an
inflation adjustment occurs.
Below is the current fee timeline:
Phase I of the fee updates included CEFs, TCEFs, Electric Capacity Fees, and Raw Water/CIL
and were adopted in 2017. Phase II included Wet Utility PIFs and step II of CEFs and TCEFs,
which were approved in 2018. Development review and building permit fees were originally
included in Phase II but were decoupled from the 2018 update.
Due to the concern in the development and building community around fee changes, Council
asked for a fee working group to be created to foster a better understanding of fees prior to
discussing further fee updates. In August of 2017, the Fee Working Group commenced
comprised of a balanced group of stakeholders – citizens, business-oriented individuals, City
staff and a Council liaison. The Fee Working Group met 14 times and was overall supportive of
the fee coordination process and proposed fee updates.
The 2019 phase III update includes Electric Capacity fees, Water Supply Requirement fees, Wet
Utility Plan Investment Fees and Step III of the 2017 Capital Expansion Fees. After the 2019 fee
update, fee phasing will be complete with regular two and four-year cadence updates beginning
in 2021.
Development Review Fees were initially planned to be part of the 2019 update but have been
decoupled and will come forward at a later date. The 2019 Fee Working Group is focused on
Development Review fees only and has met three times as of mid-August. The 2019 Fee
Working Group consists of a balanced group of stakeholders – citizens, business-oriented
individuals and City staff.
2019 Utility Fee Updates
The proposed changes to Utility Fees for a single-family, residential home include a 1.7%
increase to the Electric Capacity Fee (ECF) and increases to the three Wet Utility Fees ranging
between 1.5% and 6.7%. The Water Plant Investment Fee (PIF) is proposed to increase 6.7%, the
Wastewater PIF is proposed to increase 1.5% and the Stormwater PIF is proposed to increase
3.3% from current fee levels.
The chart below summarizes the proposed Utility Fees for a single-family home, assuming an
8,600 square feet lot and 4 bedrooms:
2019 Capital Expansion Fee Updates
The chart below shows the current and proposed fee updates for CEFs:
Step III fees are an 11% increase from current fee levels (Step II). CEF fee increases are 100% of
full fee levels recommended in 2017. The CPI-U index for Denver-Aurora-Lakewood is used for
CEF inflation (1.3% in 2019).
Comparison Charts
Fort Collins proposed fees are in the upper-middle of the pack:
The following chart shows neighboring cities across water districts with and without raw water.
Fort Collins fees are in line with neighboring cities:
Step III - Full fees proposed in 2017
Land Use Type Unit
N'hood
Park
Comm.
Park Fire Police Gen. Gov't
Current
Total
Step III
Total w
Inflation
%
Increase
w
Inflation
Residential, up to 700 sq. ft. Dwelling $1,721 $2,430 $421 $236 $574 $5,152 $5,724 11%
Residential, 701-1,200 sq. ft. Dwelling $2,304 $3,253 $570 $319 $774 $6,911 $7,679 11%
Residential, 1,201-1,700 sq. ft. Dwelling $2,516 $3,552 $620 $347 $845 $7,543 $8,381 11%
Residential, 1,701-2,200 sq. ft. Dwelling $2,542 $3,589 $630 $352 $858 $7,630 $8,478 11%
Residential, over 2,200 sq. ft. Dwelling $2,833 $4,001 $701 $392 $955 $8,502 $9,447 11%
Commercial 1,000 sq. ft. 0 0 $531 $297 $1,451 $2,182 $2,424 11%
Office and Other Services 0 0 $531 $297 $1,451 $2,182 $2,424 11%
Industrial/Warehouse 1,000 sq. ft. 0 0 $124 $69 $342 $512 $569 11%
Fort Collins fees and the cost of code is leveling as a percentage of median new home sales
price:
Community Outreach
In an effort towards better communication, outreach and notification of impact fee changes, staff
met with 9 organizations across the City in the summer of 2019.
Overall, organizations were supportive of the approach and cadence. There was
acknowledgement that regular fee updates are necessary.
Staff also heard:
• Support for fee group recommendations
• Concerns about attainable housing - it may be less desirable to live here
• Policy questions on development standards going forward, having alignment on total cost
including operations and maintenance
Below is the 2019 fee roadmap:
ATTACHMENTS
1. PowerPoint Presentation – 2019 Fee Updates
2. EAC Capital Expansion Fees Memo Final
2019 Fee Update 1
Agenda
2
• Fee Scope & Timeline
• 2019 Fee Updates
• Utility Fees
• Capital Expansion Fees - Step III
• Comparison Charts
• Feedback & Next Steps
Fee Coordination
3
Objective:
• Review fee updates together to
provide a holistic view of the total
cost impact
• Bring impact fees forward per a
defined cadence….. 2 - 4 years
Type of Fee Fee Name
Capital Expansion Neighborhood Park
Capital Expansion Community Park
Capital Expansion Fire
Capital Expansion Police
Capital Expansion General Government
Capital Expansion Transportation
Utility Water Supply Requirement
Utility Electric Capacity
Utility Sewer Plant Investment
Utility Stormwater Plant Investment
Utility Water Plant Investment
Building
Development
Development Review, Building
Permit & Engineering Fees
Fee Timeline
4
Detailed fee studies:
• 4 years for CEF, TCEFs & Development fees
• 2 years for Utility fees
In years without updates, an annual inflation adjustment occurs
Phase 1 Phase 2 Phase 3
2016 2017 2018 2019 2020 2021
Capital Expansion Fees Update Step II Step III Update
Transportation CEFs Update Step II Update
Electric Capacity Fees Update Update Update
Water Supply Requirement Update Update Update
Wet Utility Fees Update Update Update
Development Review Fees Update Update
Fee Working Group Active Active Active
2019 Fee Group – Development Review fees only
• Three meetings as of mid-August
• Decoupled from 2019 fee update
• Plan to bring forward updates once finalized
5
Utility Fees
Utility Fee Current
Charge
2020
Charge $ Change % Change
Electric Capacity Fee $1,537 $1,563 $ 26 1.7%
Water PIF $ 3,826 $ 4,084 $ 258 6.7%
Wastewater PIF $ 3,537 $ 3,590 $ 53 1.5%
Stormwater PIF $ 1,548 $ 1,600 $ 52 3.3%
Water Supply Requirement* $11,160 $13,838 $ 2,678 24.0%
• Assumes residential, single-family home with an 8,600 square feet lot and 4 bedrooms
*Charges for going over annual water allotment are tied to increase in Water Supply Requirement
Capital Expansion Fees
Step III
6
• Step III fees are an 11% increase from current fee levels (Step II)
• CEF fee increases are 100% of full fee levels recommended in 2017
• 1.3% Inflation - CPI-U index for Denver-Aurora-Lakewood
Step III - Full fees proposed in 2017
Land Use Type Unit
N'hood
Park
Comm.
Park Fire Police Gen. Gov't
Current
Total
Step III
Total w
Inflation
%
Increase
w
Inflation
Residential, up to 700 sq. ft. Dwelling $1,721 $2,430 $421 $236 $574 $5,152 $5,724 11%
Residential, 701-1,200 sq. ft. Dwelling $2,304 $3,253 $570 $319 $774 $6,911 $7,679 11%
Residential, 1,201-1,700 sq. ft. Dwelling $2,516 $3,552 $620 $347 $845 $7,543 $8,381 11%
Residential, 1,701-2,200 sq. ft. Dwelling $2,542 $3,589 $630 $352 $858 $7,630 $8,478 11%
Residential, over 2,200 sq. ft. Dwelling $2,833 $4,001 $701 $392 $955 $8,502 $9,447 11%
Commercial 1,000 sq. ft. 0 0 $531 $297 $1,451 $2,182 $2,424 11%
Office and Other Services 0 0 $531 $297 $1,451 $2,182 $2,424 11%
Industrial/Warehouse 1,000 sq. ft. 0 0 $124 $69 $342 $512 $569 11%
Fee Comparison:
For Median New Home Sales Price $488K*
7
Fort Collins Proposed Fees in the Upper-Middle of the Pack
Neighboring Cities Fee Comparison
8
Deeper Dive with Local Builders to Compare Fees Across Water Districts
With and Without Raw Water
Neighboring Cities
New Median Sales Comparison with Fees
9
Fort Collins Fees are Inline with Neighboring Cities
Fort Collins Fee Stack
Median New Home Sales
10
Fort Collins Fees & Code Cost Impact is Leveling %
of Median New Home Sales Price
Summer 2019 Outreach
11
Organization Staff Status
Affordable Housing Board All Complete
Building Review Board All Complete
Economic Advisory Commission All Complete
Fort Collins Board of Realtors All Complete
Local Legislative Affairs Committee All Complete
Northern Colorado Homebuilder's Association All Complete
Super Issues Forum All Complete
Energy Board Utilities Complete
Water Board Utilities Complete
Downtown Development Authority Dev. Review On Hold
Housing Catalyst Dev. Review On Hold
North Fort Collins Business Association Dev. Review On Hold
Planning & Zoning Board Dev. Review On Hold
South Fort Collins Business Association Dev. Review On Hold
2019 Outreach: What We Heard
12
Overall supportive of approach and cadence
We also heard:
• Acknowledgement that regular fee updates are necessary
• Supportive of fee group recommendations
• Concerns about attainable housing - it may be less desirable to live here
• Policy questions - development standards going forward, alignment on total cost
(including operations and maintenance)
2019 Roadmap
13
• All fee categories initially planed to update in 2019 except for Transportation CEFs
• Phasing complete after 2019 with regular two and four-year cadence beginning in 2021
• Development Review Fee Working Group underway
March May June/July August October 1/1/2020
Capital Expansion Fees CFC Outreach CFC Council Effective
Transportation CEFs
Electric Capacity Fees CFC Outreach CFC Council Effective
Water Supply Requirement CFC Outreach CFC Council Effective
Wet Utility Fees CFC Outreach CFC Council Effective
Development Review Fees CFC Working Group Working Group
Next Steps
14
Proposed Next Steps
• October 8th: Council Work Session
• November 5th & 19th: Ordinance readings subject to
Council direction
• 2021 updates effective January 2022
Backup
15
16
Water PIFs
Customer Class Criteria Current Charge 2020 Charge $ Change % Change
Single Family 8,600 sq ft 3,826 4,084 $ 258 6.7%
Duplex & Multi-family 3,435 sq ft 1,423 1,546 $ 123 8.6%
Commercial
Meter Size
3/4" by tap size 7,930 8,790 $ 860 10.8%
1" by tap size 20,960 23,060 $ 2,100 10.0%
1 1/2" by tap size 43,510 45,610 $ 2,100 4.8%
2" by tap size 72,450 78,820 $ 6,370 8.8%
WATER Plant Investment Fees
17
Wastewater PIFs
2018 2020 Change in Proposed %
Customer Class Volume Volume Volume PIF Change
GPD GPD GPD $
Single family residential 230 229 -0.4% 3,590 1.5%
Duplex and Multi-family 170 165 -2.9% 2,590 0.1%
Commercial
Meter Size - inches
3/4 490 492 0.4% 7,710 2.6%
1 1,080 1,096 1.5% 17,190 3.8%
1.5 2,070 2,063 -0.3% 32,350 2.0%
2 4,300 4,281 -0.4% 67,120 2.0%
Wastewater Plant Investment Fees
18
Stormwater PIFs
Rate Class 2019 2020 $ Change % Change
Gross Area Developed (sq ft) 8,600 8,600
Common Area Allocation (sq ft) 6,156 6,156
Base Rate (per acre*) $9,142 $9,447
Runoff Coefficient 0.5 0.5
Total Fee $1,548 $1,600 $52 3.3%
Gross Area Developed (sq ft) 43,560 43,560
Base Rate (per acre*) $9,142 $9,447
Runoff Coefficient 0.8 0.8
Total Fee $7,314 $7,558 $244 3.3%
Commercial
Stormwater Plant Investment Fee
Residential
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff:
Mike Beckstead
Date: August 19, 2019
SUBJECT FOR DISCUSSION
2019 Revenue Priorities
EXECUTIVE SUMMARY
Financial Services coordinates updates to existing council approved fees to provide council and
the community a holistic understanding of the cost impact of these changes. Consistent with that
focus, staff has assembled the current discussions occurring around needed revenue sources to
facilitate a high-level discussion of the organization’s revenue needs and priorities.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council Finance Committee have any concerns with the revenue opportunities
under discussion?
2. Feedback and thoughts on prioritization?
BACKGROUND/DISCUSSION
See attached PowerPoint Presentation
ATTACHMENTS
1. PowerPoint Presentation – CFC 2019-08-19 Revenue Priorities
1
2019 Revenue Priorities
August 19, 2019
Council Finance Committee
Agenda
2
• Potential New Revenue Across the City
• Prioritization & Next Steps
Potential New Revenue
Across the City
3
Potential New Revenue: Status:
• Transit Revenue Assessing per Transit Plan
• Stormwater Inspection Fee In Development
• Affordable Housing Impact Fee Find $, Conduct Study
• Parks & Trails Asset Mgt. Program Master Plan in process
• Community Park Refresh Master Plan in process
Next Steps
4
1. Does CFC have any concerns with the revenue opportunities
under discussion?
2. Feedback/thoughts on prioritization?
5
Back-Up
Transit Revenue
6
Description
• $300M Capital Improvements over next 20 years
• $30M estimate in ongoing operations costs by 2040
• Current cost $20M annually
Potential revenue sources
• 80% federal match (not guaranteed) to support capital
investments - $240M
• ¼ cent sales tax for ongoing operations - $8M annually
• Larimer County tax proceeds - $3-5M annually
• Utility Fee?
• Other funding sources to be identified
Stormwater Water Quality Inspection Fee
Why needed/why now
• Current costs paid by Stormwater rate payers
• “User Pay” approach
• Significant growth: 54 projects in 2012 to 150 today
Description
• Fee designed to recover inspection costs from development
• Fee would be collected from developers
Revenue estimate of $70,000-$80,000 annually
• Based on average number of sites added/year (34)
• 90% of new construction sites have 25 or less home lots
• Fees would range from $700 to $3000
• Single home = $700 fee
• 10-acre site = $2267.25 fee
7
Affordable Housing Impact Fee
8
Why needed/why now
• To meet affordable housing goals – 10%
Description
• Fund construction and renovation of Affordable Housing
• Hybrid Commercial/and or Residential Linkage Fee
Revenue gap estimated at $5M to 6M annually
• $8M annually to achieve City’s affordable housing goals
• Offset by Affordable Housing Capital Fund with $400k in 2020
and $500k until 2025; and
• Competitive process funding between $1.5 and $3M
• Update Nexus Study ($60k - $75k) needed to determine the
right type of fee and estimated yield
• Explore other mechanisms - fee to only close some of the gap
Parks and Trails
Asset Management Program
9
Why needed/ why now
• 51 parks with an average age of 34 years
• 20 years of $550k static funding addresses only
emergency/immediate need
• Park acreage grew from 593 to 945 acres
• 44 miles of hard surface trails with no funding source
Description
• Comprehensive asset management program for aging Parks
and Trails infrastructure
• Revenue would renovate or replace current infrastructure that
is no longer useable or in safe condition for general public
Community Park Refresh Fee
10
Why needed/why now
• 4 of 7 community parks in need of refresh
• City Park, Edora, Lee Martinez, and Rolland Moore
• Park refresh needs are ongoing for all community parks
Description
• Update or changes to an existing community park
• Address community needs or recreational trends through repair,
alterations, and/or additions while upholding park character
• Park Refresh Definition (10/30/2018 Council Work Session)
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Sean Carpenter and Travis Storin
Date: August 19, 2019
SUBJECT FOR DISCUSSION: Epic Homes 15-year Capital Options
EXECUTIVE SUMMARY
This item will provide an update to Council Finance regarding the Epic Homes 15-year capital
options and discussion of each. Topics include:
• Review of capital recruitment process;
• Importance of 15-year capital in achieving desired program outcomes;
• 15-year capital options;
• Banking relationship with the national green bank; and
• Interest rate swap background.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• Does the Committee support funding a 15-year Epic Loan option?
• Which 15-year capital option does the Committee support?
• Does the Committee support staff analysis of the debt policy and the exception
request if the variable-rate, collateralized option is desired?
BACKGROUND/DISCUSSION
Fort Collins’ innovative Epic Homes portfolio supports several community and City Council
priorities, including ambitious goals around energy efficiency and renewables, reduced
greenhouse gas emissions and increased equity and wellbeing of all residents. Meeting these
objectives will require, among other activities, greater numbers of property owners to undertake
comprehensive efficiency improvements in the coming years, particularly for older, less-efficient
rental properties which make up a large percentage of the City’s housing stock. An ongoing and
attractive financing structure to support energy efficiency retrofits will be a critical element for
success moving forward.
On-Bill Financing (OBF) 1.0 (also known as the Home Efficiency Loan Program or HELP)
operated successfully from 2013 through 2016 when the encumbered funds reached the
maximum outstanding loan balance of $1.6M. At that time, Elevations Credit Union was selected
through an RFP process to continue HELP for energy loan financing. Utilities staff qualify the
efficiency project based on the rebate measures in the Efficiency Works Home program;
however, the loan origination and servicing are independent of Utilities programs. With the
implementation of Epic Loans, Elevations loans will continue to be an option for interested
customers.
Epic Loans began in August 2018 during the Champions Phase of the Bloomberg Mayors
Challenge, using the $100,000 award from the Champions Phase and a $200,000 grant from the
Colorado Energy Office (CEO) to revitalize on-bill financing. Fort Collins is among nine
winning cities for the Mayors Challenge, each receiving $1M to implement their winning idea.
Leveraging external capital is critical to achieving the long-term “revolving loan” vision of Epic
Loans and offers a continuing source of funds to meet increasing customer demand for energy
efficiency financing. Epic Loans is designed to balance the programmatic objectives and
financial requirements of the City, while also meeting the needs and expectations of capital
providers and Utilities customers.
Council Finance Meetings Review
Staff presented to Council Finance in November 2018 regarding the program background and
issuing an RFP for third-party capital sources. The City issued RFP #8842 in December 2018
and staff pursued conversations and negotiations with respondents and other potential capital
providers.
Staff presented to Council Finance in May 2019 regarding the potential capital sources and next
steps for bringing capital agreements to Council. Staff have continued negotiations with potential
capital providers (including a locally managed national bank, a regional bank, Colorado Clean
Energy Fund, and the CEO) and received Legal and Purchasing review of draft contracts.
Staff presented to Council Finance in July 2019 regarding capital agreement terms. Staff was
directed to bring two of the three capital sources to full Council for consideration. Staff was also
directed to explore 15-year capital options and provide additional information on interest rate
swaps to Council Finance.
Importance of 15-year Capital
During prototyping for the Bloomberg Mayors Challenge competition, rental property owners
reported that no money down, affordable monthly payments are critical considerations, in
particular for owners with multiple units. OBF 1.0 proved these factors are also important for
owner-occupied properties, where many homeowners preferred longer term loans which often
allow for more comprehensive projects and /or solar installations with affordable monthly
payments. In 2016, Fort Collins Utilities implemented the Efficiency Works Neighborhood pilot,
with nearly 60 long term loans issued totaling over $750,000. An additional $1.5M in 15-year
capital for Epic Loans would support approximately120 similar projects.
Throughout the program history (2013-2019, including Elevations Credit Union loans), 35% of
customers have used longer loan terms to reduce monthly payments and / or undertake more
comprehensive energy efficiency projects. As a result, the longer-termed loans account for a
larger percentage of the total loan portfolio value, at 45%. When looking specifically at on-bill
financed loans (2013-2016 and 2018-2019), nearly 50% of customers have used longer term
loans (Table 1), accounting for approximately 60% of the on-bill financed loan portfolio value.
In short, longer term loans are generally used for bigger, more comprehensive projects that can
generate increased benefits for the people who live in and / or own those homes, as well as
positively impacting overall City goals.
Table 1. Summary of On-Bill Financed Projects by Loan Term
3 & 5 year loans 7 & 10 year loans 15 (& 20) year loans
Projects 38 65 95
Percentage 19% 33% 48%
In order to keep monthly payments low and make energy retrofit projects attractive, longer loan
terms are required. With a 15-year loan at the average long-term loan amount of $13,000,
monthly payments are $101. These attractive monthly payments are critical for overcoming both
upfront cost and continual cost barriers for home and rental property owners considering energy
upgrades.
15-year Capital Options
Per Council Finance request, staff has identified the following four options for 15-year capital:
1. Pursue an agreement with the national green bank for up to $2.5M with the required 50%
deposit, and use an interest rate swap to stabilize variable rates (This is the staff
recommendation.)
2. Use L&P Reserves to fund $1.5M, in addition to the current $1.6M that is currently
deployed or has been repaid
3. Use only the 15-year funding available from CEO, Bloomberg, and repaid L&P Reserves
4. Implement a hybrid of Options 2 and 3, using L&P Reserves to provide backfill demand
once other Option 3 sources are exhausted
To provide sufficient financing for the expected number of projects, the short-term (3-4 year)
capital goal is $7M to $8M. This assumes $1.5M to $2M annually in energy efficiency project
financing. As staff has outlined, sufficient 15-year capital is critical to the success of the overall
program.
Option 1: National Green Bank
Staff has been in discussions with a national green bank to negotiate 15-year loan terms, which
were presented and discussed at the July 15, 2019 Council Finance meeting. The terms include:
• UAmount:U Up to $2,500,000 (staff expects to only draw $1,500,000)
• ULength:U 15-years inclusive of draw period
• UDraw period:U Up to 2 years with quarterly draws based on customer loans
• UVariable rate:U Wall Street Journal Prime + 0.25% (currently 5.50%)
• UCollateral:U City will deposit 50% of drawn amount into interest bearing account from
L&P Reserves (staff expects $750,000 deposit)
• UPre-payU: City may pre-pay in whole or in part at any time and without penalty
• URepayment positionU: Senior pledge on customer loan repayments and second position
on Electric Utility revenues, after the more senior pledge held by revenue
bondholders
Banking Relationship
Staff issued RFP #8842 in December 2018, to which the Colorado Green Energy Fund was one
of two respondents. The Colorado Green Energy Fund has found and managed the relationship
with a financier willing to provide 15-year terms (Figure 1). If this option is selected, Fort
Collins Utilities would borrow from the Colorado Green Energy Fund.
Figure 1. Banking Relationship with the Colorado Green Energy Fund and Commercial Bank
Policy Interactions
This Option has two interactions with Financial Policy #7 - Debt.
The first interaction is the required 50% collateral, or credit enhancement. Staff assesses an
appropriate use of a credit enhancement via the collateral pledge.
The second interaction is the variable rate and/or derivative swap instrument. The proposed
lender is offering a variable interest rate for the loan duration. Staff has attempted to negotiate
rate lock-in rights during the draw period, but the lender has been unable to flex. An alternative
is to use an interest rate swap, which would qualify as a derivative instrument and is covered by
policy as an instrument the City should avoid. Staff assesses a “plain vanilla” interest swap is a
feasible solution, although it carries a cost premium, but it would effectively “lock in” a fixed
rate on the 15-year note if City is unwilling to accept variable rate risk.
Interest Rate Swap
Interest rate swaps are a common financial instrument, used by a wide variety of businesses to
manage their debt service payments in a manner that best suits their particular organizational
needs. For some entities, variable rates are preferred; for others, fixed rate obligations are best. In
this option, the City would negotiate with another party (who prefers a variable rate interest
obligation) and the City would exchange the variable rate obligation under the proposed loan
with the national green bank (Option 1) for the swap party’s fixed rate instrument (Figure 2),
using well established markets / providers for these types of financial transactions. The swap
would be based on the notional principal, and only the netted difference between fixed and
variable interest rate amounts is paid. The interest swap party would also agree to a settlement
cadence.
•Midwest Commercial
Bank providing 15-
year capital
Financier
•Colorado Green
Energy Fund
managing relationship
and finding financiers
(RFP respondent)
Broker •Fort Collins Utilities
borrowing from green
bank and issuing
loans to customers
Fort Collins
Figure 2. Example of Cash Flows of Interest Rate Swap
Option 2: Light & Power Reserves
Currently, $1.6M of L&P Reserves have been deployed for on-bill financing since 2013, of
which nearly $400,000 have been repaid without any losses to date. Option 2 would dedicate an
additional $1.5M of L&P Reserves for 15-year loans. Available Reserves at the end of 2018
were $8.4M. Anticipated 2019-20 budget changes include a 2019 drawdown on Reserves by
$340K and a 2020 increase on Reserves by $320K. The Capital Improvement Plan will be
updated in Fall 2019, prior to updating the Strategic Financial Plans for a November 2019
presentation to Council Finance.
There is no anticipated need to increase electric rates for a one-time $1.5M appropriation of
Reserves. However, appropriating L&P Reserves for use in Epic Loans will make those funds
unavailable for use in other future capital projects, until such time that those funds are repaid by
Epic Loan customers.
Option 3: 15-year Funding from Grants and Low-Cost Capital Only
There are currently other sources of limited 15-year capital, which include:
• Up to $1M low-cost loan from CEO dedicated to 15-year projects (to be presented to
Council on September 3, 2019)
• Re-allocation of up to $900K from Bloomberg and CEO grant funds, away from 5-year
and 10-year projects
Without external or Reserve financing, the full capital stack across all product offerings will
support approximately 130 fewer home upgrades for each “cycle” of the loan portfolio (e.g. each
time the capital is lent, repaid and therefore available to be re-loaned), or approximately 370
projects versus an estimated 500 projects. In this Option, the capital burn rate would be 1 to 1.5
years faster.
Option 4: Hybrid of Options 2 & 3 Using L&P Reserves After Other Sources Exhausted
A final Option is to use the 15-year capital sources outlined in Option 3 above and use L&P
Reserves once all other sources have been exhausted.
15-year Capital Option Analysis
Staff analysis of the benefits and challenges for each Option is outlined in Table 2. If supported
by Council Finance, staff recommends bringing Option 1 to full Council for consideration on
October 1, 2019.
Table 2. Analysis of 15-year Capital Options
Option Benefits Challenges
Option 1:
National Green
Bank (staff
recommendation)
• Provides sufficient funding for
expected 15-year projects
• Scalable for the long-term, and
replicable for other cities
• Only market capital provider
willing to provide 15-year
terms, all other market capital
providers will not go over 10-
year terms
• Requires a 50% deposit into an
interest-bearing account from
L&P Reserves
• Requires a policy exception to
use an interest rate swap
• Contingent on other low-cost
capital sources to provide an
attractive rate for customers
Option 2: Light
& Power
Reserves
• Provides easy access to low-
cost capital
• Impacts the opportunity costs of
other important Utilities needs
• Not scalable for long-term, or
replicable for other cities
Option 3: 15-
year Funding
from Grants and
Low-Cost
Capital Only
• No additional capital
agreements needed (after CEO
loan presented to full Council)
• Does not provide sufficient
funding for expected 15-year
projects
• Not scalable for long-term
• Removes low-cost capital from
5-year and 10-year loans for
blending to create attractive
customer rates
Option 4: Hybrid
of Options 2 & 3
Using L&P
Reserves After
Other Sources
Exhausted
• No additional capital
agreements needed (after CEO
1
August 19, 2019
Epic Homes 15-year Capital Options
Sean Carpenter, Climate Economy Advisor
Travis Storin, Accounting Director
Agenda
• Importance of 15-year capital
• 15-year capital options
• Interest rate swap background
Meeting Objective: Determine Council Finance support of 15-year capital option 2
Review & Updates from Previous Council Finance Meeting
November 2018, May 2019 and July 2019 Finance Committee
• Issued RFP for third-party capital sources
• Reviewed history of On Bill Finance / Bloomberg Mayors Challenge / Epic Homes
• Reviewed short term (3-4 year) and long term (5+ year) capital objectives
• Approved staff to negotiate draft agreements with potential capital providers
• Finance Committee in-depth review of drafted terms
• Approval for presentation to City Council for consideration of 2 of 3 agreements
August 2019 Finance Committee
• Discussion of 15-year capital source options, and if supported which to present to City
Council for consideration
• Review of interest rate swap and policy exception
3
Why 15-year loan terms?
• Long term loans account for:
• 35% of project loans
• 45% of project loan dollars
• What does this mean? Longer terms lead to comprehensive projects
• Important for all property owners concerned about monthly payments
• $25,000 max loan for 15-year term = $200/month
• $13,000 average loan for 15-year term = $101/month
• Comprehensive projects tend to use longer term loans
4
15-year Capital Options
1. National green bank up to $2.5M with 50% deposit and interest rate
swap (staff recommendation)
2. Light & Power reserves fund $1.5M (in addition to current $1.6M)
3. 15-year funding from CO Energy Office, Bloomberg, and repaid L&P
reserves only
4. Hybrid of 2 & 3: L&P Reserves provide backfill demand once other
Option 3 sources are exhausted
5
Option 1: National Green Bank
• Amount: Up to $2,500,000 ($1,500,000 expected)
• Length: 15-years inclusive of draw period
• Draw period: Up to 2 years with quarterly draws based on customer loans
• Variable Rate: Wall Street Journal Prime + 0.25% (currently 5.50%)
• Collateral: City will deposit 50% of drawn amount into interest
bearing account from L&P Reserves ($750,000 expected)
• Lender unable to flex on the collateral nor on a fixed rate
• Would drive an exception request to the Council’s debt policy
• City may pre-pay in whole or part at any time without penalty
6
Interest Rate Swap Policy
• Derivative instruments – Swap
Policy language: Derivative type instruments and terms will be avoided.
Staff analysis: “Plain vanilla” interest swap has a cost premium but
effectively locks in fixed rate on the 15-year note if City is unwilling to
accept variable rate risk
7
Interest Rate Swap
8
Prime + 0.25%
5.75%
NET: 5.75%
All rates are theoretical and not indicative of potential market
Cash Flows of Swap - Example
City of Fort
Collins
Interest
Swap Party
National Green
Bank
Prime + 0.25%
• Market is “over-the-counter” rather than
exchange-traded
• Cost neutral to both counterparties at
time swap is executed
• Notional Principal vs. Principal
• Only netted difference between fixed
and variable interest amounts paid
• Settlement cadence agreed to with
counterparty
Option 2: Light & Power Reserves
Available Reserves (end of 2018) = $8.4M
Anticipated 2019-20 budget change to Available Reserves:
• 2019 drawdown Reserves by $340K
• 2020 increase reserves by $320K
Capital Improvement Plan is being updated this Fall ahead of updating
the Strategic Financial Plans for November presentation to this
Committee.
No anticipated need to increase rates for a one-time $1.5M
appropriation, however, it may delay some capital investment.
9
Option 3 & 4: 15-year funding from
grants and low-cost capital only
Option 3
• $1M from CO Energy Office is dedicated for 15-year projects
• Could re-allocate up to $900K of Bloomberg/State funds away from
the 5-year and 10-year projects
• Without external or reserve financing, the full stack across all product
offerings would support ~370 projects vs. ~500
• Capital burn rate would be 1-1.5 years faster
Option 4
• Pulling from L&P Reserves once all other 15-year capital exhausted
10
15-year Capital Options
Option Benefits Challenges
1. National green bank • Sufficient funding for
expected 15-year projects
• Scalable for long-term
• Only market capital willing to
loan at 15-years
• Requires 50% deposit
• Requires policy exception for
interest rate swap
• Contingent on low-cost
capital to be attractive
2. L&P reserves • Easy access to low-cost
capital
• Opportunity costs of other
Utility needs
• Not scalable for long-term
3. 15-year funding from
grants and low-cost
capital only
• No additional capital
agreements needed
• Will not provide sufficient
funding for expected 15-year
projects
• Not scalable for long-term
4. Hybrid of 2 & 3 • No additional capital
agreements needed
• Not scalable for long-term
• Opportunity costs of other
Utility needs 11
Staff Recommendation
Questions
• Does the Committee support funding a 15-year Epic Loan option?
• Which 15-year capital option does the Committee support?
• Does the Committee support staff analysis of the debt policy
and the exception request if the variable-rate, collateralized
option is desired?
12
13
3rd Party Capital
13
Backup Slides
Wrap Up
Next steps
• Proceed to Council 9/3 and 9/17 for readings of two capital sources
• If supported, proceed to Council 10/1 for reading of 15-year capital source
• Develop recurring framework for updated annual cash flow projections and
reporting/measurement
14
Aug Sept Oct Nov Dec Jan +
Parameters
Ordinances at
Council (2
agreements) (9/3)
Sign 15-year
note
Parameters
Ordinances at
Council (15-year
agreement) (10/1)
15
Epic Homes
A comprehensive portfolio for single-family home performance
National Green Bank: Banking Relationship
• Midwest Commercial
Bank providing 15-
year capital
Financier
• Colorado Green
Energy Fund
managing
relationship and
finding financiers
(RFP respondent)
Broker • Fort Collins Utilities
borrowing from green
bank and issuing
loans to customers
Fort Collins
16
Capital Type Provider Term Rate Amount
Internal & Grant
Previously authorized Light & Power
reserves
Ongoing 0% $1,600,000
Bloomberg Philanthropies Grant 0% $688,350
Colorado Energy Office – Grant Grant 0% $200,000
Internal Subtotal $2,488,350
External Market
Colorado Energy Office – Loan 15 year 1.25-2.25% Up to $1,000,000
National Commercial Bank 5 & 10 year 3.95% -
4.25%
Up to $2,500,000
National Green Bank 15 year 5.50% Up to $1,500,000
External Subtotal $5,000,000
Total $7,488,350
Future Capital Stack Summary
17
Epic Loan Retail Rates
• Targeting 100 basis point
spread to mitigate rate risk
during the variable period
• Blended capital cost: 3.33%
• Blended product yield: 4.30%
• Updated interest rates to be
adopted by CFO, effective
8/1/19 pursuant to Code
• City no longer offering 20-year
terms
Loan
Term
Projected
Cost of
Capital
Customer
Rate
(Effective
Jan. 2019)
Customer
Rate
(Effective
Aug. 2019)
3 or 5
years
2.69% 3.49% 3.75%
7 or 10
years
2.74% 3.99% 4.25%
15 years 4.25% 4.49% 4.75%
18
Credit Enhancements Policy
• Credit Enhancements
Policy language: The City will not use credit enhancements unless the
cost of the enhancement is less than the differential between the net
present value of the debt service without enhancement and the net
present value of the debt service with the enhancement.
Staff analysis:
15-year facility stipulates collateral at 50% of the principal.
• Staff assesses an appropriate use of a credit enhancement.
• This pledge has been non-negotiable with the bank; NPV analysis
does not apply.
19
Variable Rate Policy
• Variable Rate Debt
Policy language: The City will normally not issue variable rate debt … certain circumstances
may warrant the issuance of variable rate debt, but the City will attempt to stabilize the debt
service payments through the use of an appropriate stabilization arrangement.
20
Risk Mitigation Techniques
• Interest rate risk
• Rate-lock options during the 2-year variable windows
• Targeted 100 basis point spread between cost of capital and product
• Respond to rapid market changes with timely updates to Epic rates
• Freeze new Epic customer offerings, as necessary
• Customer demand risk
• 2-year line of credit model matches principal borrowed vs. Epic loans
• If undrawn amounts remain at end of 2-years, City may pursue
renewal, draw remaining amounts, or close out the line(s)
• Customer default risk
21
Cash Flow Analysis
22
• Ample capital to meet projected demand over 5 years
• Planned to $4.7M of loans issued over 5 years (most likely scenario) vs. full
deployment of $7.3M of available capital (highest demand scenario)
• If full deployment of capital stack occurred City remains cashflow positive
2nd Half
2019 2020 2021 2022 2023
Beginning Cash (authorized reserves) $ 370 $ 80 $ 100 $ 170 $ 250
+ Income from Existing Loans $ 70 $ 140 $ 140 $ 130 $ 120
- Deployment of New Loans $ (380) $ (1,070) $ (1,320) $ (1,070) $ (850)
+ Income from New Loans $ 10 $ 120 $ 290 $ 450 $ 570
+ Pull from Lenders $ - $ 870 $ 1,180 $ 940 $ 720
- Repayments to Lenders $ - $ (50) $ (210) $ (380) $ (440)
End Cash $ 80 $ 100 $ 170 $ 250 $ 370
Historic Loan Stats
Loan Count & Amounts Percent of Projects Using Loan
23
0%
5%
10%
15%
20%
25%
2013 2014 2015 2016 2017 2018
Percent of Projects Using Loan
0
20
40
60
80
100
120
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
2013 2014 2015 2016 2017 2018
Loan Count
Loan Amount
Sum of LoanAmount Count of ProjectIdentifier
2016 Efficiency Works Neighborhood
15- and 20-year loans:
• Nearly 60 project loans
• Over $750,000 project
loan dollars
• ~$13,000 average loan
Additional $1.5M would support 120 similar projects! 24
Core Tenets and Guardrails
Loan portfolio management
• Total target for capital for next 3-4 years: $7M - $8M
• Interest rate target: blended cost of capital, plus admin and risk premium
• Annual loans issued / originated: $1.5M - $2.0M
• Parity in length of term borrowed vs. length of term loaned
Other critical considerations
• No negative impact on Light & Power planned 2023 debt offering
• Protect Utilities credit rating & broadband’s coverage covenants
25
Capital Recruitment Process To-Date
• Feb. – Nov. 2018: Multiple meetings held with Investment Banks, Hedge Funds,
Impact Investing Firms and Local and Regional banks
• External Capital RFP #8842 for the EPIC program issued in December 2018
• Grant capital received from Bloomberg and Colorado Energy Office (CEO)
• Negotiations begun with RFP respondents in January 2019
• 1 National Bank
• 2 Regional Banks (Local and Upper Midwest)
• Brokered discussions with Coalition for Green Capital (CGC)
• Connections with impact investors via Bloomberg
• Colorado Energy Office $1M loan
26
loan presented to full Council)
• Not scalable for long-term, or
replicable for other cities
• Removes low-cost capital from
5-year and 10-year loans for
blending to create attractive
customer rates
• Impacts the opportunity costs of
other important Utilities needs
Next Steps
Staff seeks direction from Council Finance with which option to proceed for City Council
consideration. If supported, staff is tentatively scheduled to present the selected 15-year capital
option to full Council on October 1, 2019.
ATTACHMENTS
Attachment 1: Epic Homes 15-year Capital Sources, August 19, 2019
Security risks that could personally affect citizen safety and/or the security of City infrastructure
Page 9 of 23
Capital Provider Terms