HomeMy WebLinkAboutAgenda - Mail Packet - 1/31/2023 - 02 - Council Finance Committee Agenda – February 2, 2023Finance Administration
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AGENDA
Council Finance & Audit Committee
February 2, 2023
4:00 - 6:00 pm
Zoom Meeting https://zoom.us/j/8140111859
Approval of Minutes from the January 5, 2023, Council Finance Committee meeting.
1.Sustainable Revenue/ CCIP G. Sawyer
J. Poznanovic
Presentation: 20 mins.
Discussion: 20 mins.
2.Airport Terminal T. Storin
Presentation: 10 mins.
Discussion: 20 mins.
3. Trash Contracting Admin Fee Study & Potential Appropriations K. Beckham
Presentation: 10 mins.
Discussion: 20 mins.
4.Audit Selection Process 10 mins. T. Storin
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Council Finance Committee
2023 Agenda Planning Calendar
RVSD 1/25/23 ck
Feb. 2nd 2023
Sustainable Revenue / CCIP 40 min G. Sawyer
J. Poznanovic
Airport Terminal 30 min T. Storin
Trash Contracting Admin Fee Study & Potential Appropriations 30 min K. Beckham
Audit Selection Process 10 min T. Storin
March 2nd 2023
Utility Billing System Appropriation 40 min G. Stanford
L. Smith
Connexion – Capital Management 30 min B. Dunn
Annual Reappropriation Ordinance 20 min L. Pollack
April 6th 2023
Auditor RFP Process 30 min B. Dunn
Sustainable Timberline Recycling Center TBD M. Saylor
West Elizabeth Appropriation Request M. Martinez
Encampment Clean-up 20 min R. Venkatesh
M. Yoder
May 4th 2023
Sustainable Revenue - Climate H. Depew
July 6th
Auditor Interviews (B. Dunn)
September 7th
Annual Adjustment Ordinance (20 mins. L. Pollack)
2024 Budget Revisions (45 mins. L. Pollack
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Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Council Finance Committee Meeting
January 5, 2023
Via Zoom
Council Attendees: Julie Pignataro, Emily Francis, Kelly Ohlson, Shirley Peel
Staff: Kelly DiMartino, Travis Storin, John Duval, Ginny Sawyer, Nina Bodenhamer,
Blaine Dunn, Jo Cech, Holly Mason, Randy Bailey, Trevor Nash, Renee Reeves,
Monica Martinez, Lance Smith, Gerry Paul, Lawrence Pollack
Megan Valliere, Dave Lenz, Kerri Ishmael, Victoria Shaw, Zack Mozer,
Erik Martin, Carolyn Koontz
Others: Jason Licon, Airport Director
Molly Bohannon, Coloradoan
Wade Troxell
______________________________________________________________________________
Meeting called to order at 4:00 pm
Approval of minutes from the December 1, 2022, Council Finance Committee Meeting. Kelly Ohlson moved for
approval of the minutes as presented. Emily Francis seconded the motion. Minutes were approved unanimously via
roll call by; Julie Pignataro, Kelly Ohlson and Emily Francis.
A. Airport Terminal / City Contribution
Blaine Dunn, Accounting Director
Jason Licon, Airport Director
SUBJECT FOR DISCUSSION
Certificates of Participation Financing: Hughes Stadium Land Purchase, Airport Terminal Project
EXECUTIVE SUMMARY
City staff is seeking $9.5M in financing through Certificates of Participation (COPs) for a February 2023 closing.
These funds will be used for purchasing Hughes Stadium land ($8.5M) and a contribution to the Airport Terminal
Project ($1M).
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Does Council Finance support to bring the proposed COP financing for the first reading on 05/03/2022?
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BACKGROUND/DISCUSSION
Hughes Stadium Land Purchase
Per a voter-approved ballot measure in April 2021, the former Hughes Stadium site was rezoned as open lands,
and the City was directed to make a good-faith effort to purchase the 165-acre site from the CSU System, within
two years, at fair market value. The total estimated cost of the purchase is $12.5M; out of which $4M will come
from the City’s General Fund and Natural Area fund, and the remaining $8.5M will be secured through the COP
financing. Costs will be allocated proportionally to corresponding funds once land use is determined.
FNL Airport Terminal Project
The Fort Collins Loveland Airport is seeking additional funding to complete their total need for the $27M project
of a new terminal facility. This new terminal will replace the inadequate, temporary facilities used for growing
multi-modal transportation segment, charters, and future airline services. The new terminal will include two
airline gates, Denver Airport transportation, and transit access. The total cost of the project is being funded by
Federal Funds ($23M), Airport Capital Reserves ($2M), City of Loveland contribution ($1M), and seeking a City of
Fort Collins Contribution of ($1M). This will give the project the total needed to complete the work.
Debt Structure
The City is seeking to borrow a total of $9.8M, $9.5M for the projects and $300k in closing costs, with the COPs.
The COPs will have a fixed interest rate and a repayment term of 10 years The City will make semiannual payments
starting in June 20 with the last payment occurring in December 2032. The average annual debt service for these
projects is $1,135,000. These COPs are being issued as additional certificates against the 2019 COPs, and are the
final project under Ordinance No. 062, 2022.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Does Council Finance support to bring the proposed COP financing for the first reading on 05/03/2022?
DISCUSSION / NEXT STEPS
Julie Pignataro; are they both loans?
Blaine Dunn; we would borrow for the total amount and then give $1M to the airport
Julie Pignataro; Jason said that 4,000 folks go from NoCo. I used the service, and it was great.
Jason Licon; Fort Collins is the primary northern Colorado customer for DIA. 2,600 of the 4,000 are coming from
the Fort Collins area based on our analysis.
Julie Pignataro; is your project scalable?
Jason Licon; we have scaled it down to the point where functionality becomes impacted because we do have to
have some minimum requirements for TSA checkpoints. We do handle CSU football charters frequently – they
would utilize the space for their sports teams. They are currently using our facilities for basketball.
Kelly Ohlson; 4000 people from Northern Colorado – is that through your facility or to DIA?
Jason Licon; northern Colorado to DIA - not all through our facility.
Kelly Ohlson; I think the City of Fort Collins has a policy that our new buildings need to be LEED Gold certified.
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Jason Licon; we are striving to achieve a LEED Silver certification which is the same certification standard that
the Northern Colorado Law Enforcement Training Center was able to achieve. It can be difficult for certain type
of facilities to achieve Gold because of mechanical features such as airport screening and baggage handling
systems, etc.
Kelly Ohlson; what drove the major design change in October 2022?
Jason Licon; the rationale behind that was the supply chain, costs and inflation.
We were no longer able to get to what we had originally set out to design, at our last cost estimates were about
$12-15M over budget from where we started. With those inflationary costs and supply chain related increases,
we had to scale down the facility by approximately 1/3. Our Airport Master Plan indicated a 30K square foot
facility and now we are at just under 20K square feet.
Kelly Ohlson; I never understood why Fort Collins is even part of the airport. I go back to the days when our
contribution was $60K per year and I didn’t even like that because I don’t think we are involved in the land
planning, I don’t think we got any revenue from it. I viewed it more as a Loveland operation.
Historically, I viewed it as a facility that was used by large corporations and wealthy people.
I thought it should be revenue neutral, meaning most of the operations and maintenance and operations of the
facility should be paid for, and by extension future capital should be paid for by the main users of the airport.
I struggle with this. it is a personal dilemma for me. It seems contradictory for me to support. I need a lot of
help here
Jason Licon; in 2019, the airport was able to become financially sustainable on its own for its operations and
maintenance costs. The $60K contribution that you are referencing became something a little different. We
have the Police training facility on the campus and as part of that agreement, the subsidy went away.
A bit of history, back in 1965 when the airport opened, Fort Collins was the 2/3 shareholder of the operations
and maintenance of the airport for many years. Now it is more a 50/50 joint ownership model for the two cities.
The City of Loveland has annexed the airport. The airport has grown from a small municipal airport into a more
regional or national airport that reaches even farther than Loveland or Fort Collins, county wide and across
county borders. One of our goals is to lower the barrier for use.
Kelly Ohlson; so, once it is built primarily with federal dollars and contributions,
How much of the airport will be continuing operations and maintenance funded by users?
Who is going to be paying for the overall operations and maintenance of the new facility once it opens?
Jason Licon; O&M costs will be solely provided by the users of the facility. We are striving to be financial
sustainable in that regard. The rates and fee structures reflect the ability to cover those costs for this facility.
The bus service collects a fee of $4.50 per passenger that comes back to the airport. They pay a passenger
facility charge.
Kelly Ohlson; so, the companies themselves are not paying, the passengers are. What is the current financing of
what the two communities contribute?
Jason Licon; currently, there is no direct financial contribution, other than the land lease for the Northern
Colorado Police Training Facility.
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The airport is called the Northern Colorado Regional Airport. FNL will be the airport identifier (was
Fort Collins and Loveland). For example. the moniker used for the Chicago airport is ORD which stands for Old
Orchard airport from the 30’s. There is signage that includes the name of the airport.
Kelly Ohlson; I am going to remain neutral on this topic today.
Emily Francis; how much will it cost the city to take out the $1M?
Blaine Dunn; it will be about $120K per year for debt service cost over 10 years.
Emily Francis; for the 4,000 people traveling daily and using two airline gates. How many trips do you think that
will reduce?
Jason Licon; we don’t know exactly, for the bus services we estimate about 700 passengers a day on average
utilizing the bus services we offer at the airport. When you factor that in, having air service and added capacity
and facilities to support those will increase the market share, Our airport will become more of a travel hub for
folks who are traveling either directly from our airport to other destinations or traveling to Denver via the bus
rapid transit services that are being provided.
Emily Francis; do we need airline gates for the buses?
Jason Licon; Landline and United are partnering with us to develop a fully functional wingless flight concept that
would allow passengers to use the security screen facilities in our terminal, check baggage and then board the
bus which will take passengers directly to their gate at DIA where they can seamlessly transfer to their
connection.
Emily Francis; I am very supportive of that idea – would be great to bypass security at DIA.
My hesitancy is supporting bringing this forward is due to the fact that he airport has had multiple airlines pull
out over the last few years. I don’t see how the airport has shown they have been successful. I would be more
comfortable with this as a loan with certain benchmarks attached to the airport keeping those dollars.
Julie Pignataro; can you confirm how much extra expense we will incur for the $1M?
Blaine Dunn; we will incur an additional $200K in interest.
Julie Pignataro; so, we borrow $1M and payback $1.2M
Travis Storin; you do have the option of going into General Fund reserves if you have concerns about the
interest expense.
Julie Pignataro; I had a great tour at the airport a couple months ago. Thank you Jason.
I really want to see this happen, but I am not ready either. When I think about what our community has told us
are their priorities, this hasn’t come up. I am a little more comfortable with a loan if that is something that we
might do. So, Loveland said they would do it if we do it?
Jason Licon; their budget process included a $1M contribution that is contingent on the Fort Collins contribution.
There is no guarantee that if one city provides a contribution that the other city will match it.
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Julie Pignataro: was the County brought into this conversation?
Jason Licon; we did ask the county - we were pursing some ARPA funding for this purpose
The county has provided $1.5M in potential for two projects; a workforce development project through Aims
Community College and the other would be part of the terminal. This has not been put in the form of a
resolution or been approved yet.
Shirley Peel; does the new terminal position us to better retain other carriers?
Jason Licon; air traffic control was a need for sustainable air service. We are working on this with the Innovative
Remote Air Traffic Control tower project currently in the testing phase at the airport and offering and providing
us with air traffic control services. Those service began in March of 2020 and have been operating every day
since then. Attracting a major airline is difficult with the modular facilities that we are currently utilizing. We
show that we are making an investment in the airport and the community supports it would certainly resonate
with an air service provider.
Emily Francis; that is the reason I am more comfortable with the loan approach with benchmarks. The past
performance of the airport concerns me.
Julie Pignataro; is a loan something the airport would be interested in pursuing?
Travis Storin; point of clarification - Would it be a forgivable loan if certain thresholds are met – otherwise the
airport would have to pay it back if they did not achieve the benchmarks?
Julie Pignataro and Emily Francis responded with a yes.
Travis Storin; for the City - from an administrative standpoint, I think that would be workable.
Jason Licon; I am not sure how that would resonate with the City of Loveland. We would certainly need to have
that conversation.
Julie Pignataro to Kelly DiMartino; we have 4 out of 7 Council members are here - I am not sure how the other
Councilmembers would feel. Where do we go from here?
Kelly DiMartino; some additional context I can provide;
Mayor Arndt and I are the two Fort Collins representatives on the Airport Commission.
There are a few different ways we could go; we have a governance study underway which we haven’t really
talked about today. We have been hearing questions from multiple Councilmembers about the 50/50
ownership structure and is it the right structure? We are working with Loveland to jointly launch a governance
study and we are just in the preliminary stages of that. Ideally, if we could paint this path, we would have that
information before some of these decisions are made. That is not an option because of the timelines for federal
funding. A couple options; we could say we are hearing that there could be support if it was presented in such a
fashion as to be a loan. I think the Airport Board would need to talk about that. Again, I cannot speak to how
open the City of Loveland would or would not be about recognizing that right now we are truly 50/50 joint
owners of this facility. I understand, from their perspective why they are looking for us to be an equal 50/50
partner in capital contribution. We can talk about the loan.
We do want to keep moving forward with the bonding for Hughes. The timeline for that is such that
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if we are not comfortable today saying we could bond for this, we would lose that opportunity and would be
looking at a loan coming from the General Fund which would give us a little bit of additional time to have this
conversation. Not enough time to get through the governance study because of the capital timeline for the
federal funding, but we could have a little more time to talk about the feasibility of a loan. We are at a place of
saying, is the city willing to provide that this is a capital contribution – I am not sure we have many other options
as this project has been scaled back to the bare bones – then we would have to talk about what happens to that
federal funding.
Kelly Ohlson; Emily was proposing a forgivable loan with some benchmarks. The loan becoming a contribution
later, if certain criteria are met.
Emily Francis; that is correct - forgivable loan with certain benchmarks
Julie Pignataro; what is the timeline of the project from start to finish?
Jason Licon; the project kicked off in 2021 with design. We were anticipating the construction to begin in July of
this year continuing through October of 2024. We are required by law to spend the remainder of our Cares Act
funding ($16.9M) by July of 2024. Our timelines are pretty much as far right as they can go to meet the
requirements of the grants we have received. We are in a time crunch to make sure we are able to deliver this
project.
Jason Licon; I wanted to point out that a lot of airports do undergo terminal projects. Cheyenne, for instance
built a terminal about five years ago for air service. They understand the value of bringing in visitor spending
and other things that come along with that. Future needs - What we are asking from both cities is roughly 7%
of the total cost of this facility where traditionally, local contributions with federal funding is a minimum of
about 25%. There are a lot of communities out there spending 25-40% because those costs are typically not
eligible for federal funding. Our grant right now allows us to utilize federal funding for areas that are
traditionally ineligible including rental car areas, areas that will be utilized for airline services or bus services,
areas we can generate revenue from.
Julie Pignataro; still stuck on - where do we go from here?
Kelly DiMartino; what I am hearing based on where we are today is that we should take this out of the realm of
being associated with a bond because again, we have a time sensitive need there to move forward with the
Hughes purchase and I don’t want to derail that process.
We take the next 30 days and really dive into what would potential terms look like for a forgivable loan. Vet
that with the Airport Commission and partners in Loveland to see if there is an openness to this. Bring this back
to Council Finance in 30 days, recognizing that we would no longer be talking about a bond option but would be
talking about something coming from General Fund reserves. How does that land with people?
Julie Pignataro; that sounds good to me – we didn’t really discuss the Hughes portion of this but I do not have
any questions about the Hughes portion of the bond. How about other members of the committee?
Weren’t there other things we were talking about lumping in with this?
Travis Storin; We are talking about a second bonding later this year for Municipal Court renovations after the
design is completed and potentially the Southeast Community Center should that meet the Council’s
expectations from the work session a few weeks ago.
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Emily Francis; I remember there was a conversation about golf course irrigation.
Blaine Dunn; when we brought this forward for the initial COP Ordinance, it included the golf course irrigation
and the maintenance shop expansion which we have officially issued the COPs for that. We did not want to
issue the COPs for the Hughes land until we were closer to closing the deal with CSU. We didn’t want to borrow
this money and then sit on it for an indetermined amount of time so we split those offerings. We set up the
ordinance so we could split the offerings. We did get the funds for the irrigation project and the maintenance
shop expansion in 2022 and the funds have been dispersed and the projects are underway.
Julie Pignataro; is the rest of the Committee comfortable with the plan that Kelly DiMartino put forth?
Emily Francis and Kelly Ohlson – we are good with that
Travis Storin; for this 30-day period, I wanted to check in with Jason on the timeline there for any federal
applications we are making and whether or not it may be advisable that we go directly to Council with an
incentive or measures based resolution rather than coming back to Council Finance and then going to Council.
The time pressures may be such that Jason may be looking for something formal and parliamentary within the
next 30 days.
Jason Licon; we are looking for the ability to finalize our budget, so we are able to design toward that budget.
We have been designing with the hopes that the $2M from the cities is included in that. We will need to reduce
the scope again unless we are able to get an answer within the next 6 weeks. We are finalizing our 60% design
in another week. So, 30 days should be ok - but would be pushing it toward the end of our window of
opportunity.
Travis Storin; next Council Finance meeting is February 2nd. The next available regular Council Meeting is
February 7th -First Reading of what would presumably be an ordinance since there are dollars involved. So that
would be February 21st should there be Council support for a $1M incentive-based arrangement.
Jason Licon; that should work as we are looking at the first week in March to finalize our project budget.
Other Business;
Emily Francis; last meeting we talked about taking the large emitter fee off of the table. Could we have staff take
a look at it being a tax instead of a fee? That way we would have more discretion on where those dollars go.
Travis Storin; we could take a look at what the opportunities and issues are. We could take that back to
the team and commit to the committee that the next time that sustainable revenue comes back,
we are talking about a large emitter tax and see what our options would be.
Julie Pignataro and Kelly Ohlson support that
Travis Storin; we would bring Sustainable Funding back at the February 2nd Council Finance meeting. This could
take the form of a discussion around the CCIP renewal. I don’t want to commit on behalf of the attorneys, on
what level of research we can do on the large emitter tax specifically but we will se what we can do in the three
weeks or so before those materials are due.
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COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Ginny Sawyer, Sr. Project Manager
Jennifer Poznanovic, Sr. Revenue Manager
Date: February 2, 2023
SUBJECT FOR DISCUSSION Sustainable Funding Update
EXECUTIVE SUMMARY
The purpose of this item is to seek Council Finance Committee direction on timing and what, if
any, item(s) to consider for referral to the November 2023 ballot.
Should CFC recommend bringing a revenue option in November 2023, staff suggests focusing
on an additional tax on marijuana, alcohol, and tobacco. Revenue from this option is estimated
at an amount that could cover the existing Parks and Recreation gap that focuses on
maintaining current assets and infrastructure.
Also of note, staff is currently focusing on a November 2024 election to bring forward the Street
Maintenance renewal and the Community Capital Renewal.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council Finance support bringing a revenue question to the voters in November
2023?
2. If yes, what type of revenue increase option does Council Finance recommend?
3. Does Council Finance support pursuing the two ¼ cent renewals in November 2024?
BACKGROUND/DISCUSSION
Over the past several years, masterplan developments and updates have identified clear
funding needs in the areas of parks and recreation, transit, and housing. Along with these needs
the criticality of advancing City climate action goals has also been identified as an area of need.
Original estimated annual shortfalls ranged from six to twelve million per area.
When conversations were first initiated, funding needs included:
• Parks & Recreation - $8 to $12M annual shortfall (Parks & Recreation Master Plan)
• Transit - $8M to $10M annual shortfall (Transit Master Plan)
• Housing - $8M to $9.5M annual shortfall (Housing Strategic Plan)
• Climate - $6M+ annual shortfall (Our Climate Future Plan)
Throughout 2022, staff has worked with the Council Finance Committee (CFC) to refine and
better articulate the needs and what additional funding would accomplish. CFC discussions
have also focused on potential funding mechanisms and the impacts and implications of various
strategies.
Discussions and feedback to date have highlighted a desire to:
• Clearly define and articulate revenue needs and level of service considerations.
• Thoroughly research funding options including impacts and the context of existing and
potential new tax measures (local and regionally.)
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• Work to keep overall resident impact and tax burden as low as possible.
• Consider existing dedicated tax renewals and associated election timelines in a strategic
manner.
These considerations were also supported by the full Council at the April 12, 2022 work session.
Funding Gaps
Since April, staff has engaged with CFC in June, September, and November to clarify funding
needs. These efforts have resulted in updates to the funding gaps (see below) and more
focused funding strategies.
• Transit from $8-$10 to $14.7M
• Climate from $6M to $9.5M
With total annual shortfalls ranging from $30-$40 million discussions have focused on
understanding priorities in each area and how additional money would be spent.
Parks and Recreation needs are in operations and maintenance and infrastructure
replacement. Additional funding is needed to maintain existing assets and to stay current with
community needs and trends.
Transit funding needs have been identified to build out the transit system to the 2040 vision.
Shorter term needs would focus on capital investments and increased frequencies. Longer term
funding would focus on local grant matches for larger projects.
Fort Collins Housing goals call for increasing affordable housing stock to 10% total. Additional
funding could be utilized in a variety of ways including expanding the competitive funding
process and/or expanding and initiating City-led efforts.
The Climate Action focus would be on reduction strategies identified in Our Climate Future Big
Moves.
Through discussion and analysis at CFC and Council work sessions, sales tax, property tax and
excise/additional sales taxes have emerged as the most feasible mechanisms. The table below
demonstrates the potential revenue gain along with estimated annual impact to residents.
Capital expansion fees are listed and is something staff will pursue during the Fee Study in
2023.
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Sales Tax: Sales tax has been the most traditional revenue source for the City. Our base rate
is currently 2.85%. There are four dedicated ¼ cent taxes. These taxes are paid on any
purchase made within the city. Requires voter approval. (Groceries taxed at 2.25%).
Property Tax: Since 1992, the City has collected 9.797 mils of property tax which equates to
10.5% of a Fort Collins property owners total annual property tax. Below is the breakdown of
what a Fort Collins property owner pays in property tax.
Poudre Fire Authority gets 67% of the City’s portion (approx. 6 of the City’s 9 mills) of property
tax amount through an intergovernmental agreement. Requires voter approval.
Additional Sales Tax: An additional sales tax is an additional sales tax on the purchase price
to the end customer. For consideration in these discussions, staff has estimated additional tax
revenue using an additional 3% and 5% tax on marijuana, alcohol and tobacco.
Numerous other municipalities across Colorado have an additional tax on marijuana and have
not experienced negative impacts. Police Services has found that “gray/black” market marijuana
activity in Fort Colins is focused on transport out of state, not on sales and availability to
residents or minors. Police Services is reporting an uptick in underage sales of tobacco.
An additional sales tax would require voter approval.
Excise Tax: An excise tax is a tax on specifics goods or services paid by the businesses. Fort
Collins currently has a liquor occupation excise tax.
Staff is also researching excise tax mechanisms to generate revenue and change behavior in
natural gas use. Staff plans to discuss a natural gas excise tax and a large emitter tax with
Council Finance Committee in May of 2023.
Any excise tax would require voter approval.
Funding Scenarios
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Achieving additional funding will likely be a phased effort that lessens the funding gaps
incrementally over time. Knowing this, and through CFC conversations, demonstration
scenarios target pursuing new revenue in a $25M range.
The scenarios presented are not intended to be final or recommended options. They are
intended to demonstrate the flexibility and variable means and ways to add additional revenue
to cover the identified gaps.
The two scenarios include anticipated impacts to a household of three and range from $156
annually to $107 annually. The models focus on property tax, sales tax and excise tax.
Staff has also calculated the impact to 3-person households at both 50 and 80% AMI and found
the lowest impact to be 0.14% of total annual income to 0.32% at the high end.
Scenario A: 4.1% sales tax/estimated $156 annual cost to a 3-person household.
*Assumes a family of three
Scenario B: 3.85% sales tax (no increase). Higher property tax and impact to homeowners.
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Follow up on Taxes and State Sharebacks from December Council Work Session:
Below are the current total retail sales tax rates on alcohol, tobacco, and marijuana in Fort
Collins:
The City has a liquor occupation excise tax and had two state sharebacks until June 2022. The
City receives a monthly state marijuana tax shareback and opted out of the tobacco tax
shareback in June 2022. Previously the city exempted tax on cigarettes but now taxes
cigarettes at the City’s 3.85% rate.
*This tax is paid by the business annually based on the type of alcohol served
**The City opted out in June 2022
Election Timeline Considerations
Per the recent ballot initiative, City elections will now be in November. Ballot referral would
likely need to happen in August.
Tabor initiatives cannot be considered during special elections.
Street Maintenance and Community Capital Taxes expire December 31, 2025. November 2024
and November 2025 are two opportunities for renewal.
ATTACHMENTS (numbered Attachment 1, 2, 3,…)
1. Sustainable Funding Update PPT
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SUSTAINABLE FUNDING UPDATE
02-02-2023
Council Finance Committee
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2What We Heard From City Council
DECEMBER WORK SESSION
•Overall support to continue the consideration of a new dedicated (renewable)
sales tax, property tax, and an excise tax
•Direction to continue analysis of a natural gas excise tax option and a natural
gas fee option (as proxy mechanism for emissions)
•Support to keep all four gap areas (Parks and Recreation, Transit, Housing,
Climate) moving forward without prioritizing any area over another
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3Council Finance Direction
QUESTIONS:
Does Council Finance
support bringing a revenue
question to the voters in
November 2023?
If yes, what type of
revenue increase
option does Council
Finance recommend?
Does Council Finance
support pursuing the
two ¼ cent renewals in
2024?
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42023 Timeline
SUSTAINABLE FUNDING TIMELINE
Feb.
CFC
May.
CFC
June
Council
Work
Session
Natural gas excise
and larger emitter tax
discussion
Nov.
Elections
July
CFC
Timing and what
item(s) to target in
2023
Opportunity to
refer an item to
the ballot
Timing and what
item(s) to target
in 2023
August
Council
Meeting
Potential draft ballot
specifics
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5Mechanics & Residential Impact
Category Funding Mechanism Annual Revenue
Estimate Household Impact
Sales Tax ¼-Cent Sales Tax
(dedicated, ongoing or repurpose)$9M+
•$30.67 average per year for a resident
•Sales tax on food would remain at 2.25%
•Visitors also impacted
Property Tax 1 Mill Property Tax $3.5M •Residential annual increase of $21.45
•Commercial annual increase of $87.00
2 Mill Property Tax $7M+•Residential annual increase of $42.90
•Commercial annual increase of $174.00
3 Mill Property Tax $11M+•Residential annual increase of $64.35
•Commercial annual increase of $261.00
4 Mill Property Tax $14.5M+•Residential annual increase of $85.80
•Commercial annual increase of $348.00
5 Mill Property Tax $18M+•Residential annual increase of $107.25
•Commercial annual increase of $435.00
Additional
(Excise) Sales
Tax
5% Tax on Specific Goods $5M •$5 per $100 purchase in Fort Collins
•Visitors also impacted
Capital
Expansion Fee Reconfigure/Broaden Application $2M •Net neutral for residential and commercial
permit feesPage 21 of 77
6Follow up on Taxes
Taxing Authority Cigarettes Other Tobacco Alcohol Marijuana
State (Excise)$1.94 (per pack)---
State 2.90%2.90%2.90%15.00%
County 0.0%0.80%0.80%0.80%
City 3.85%3.85%3.85%3.85%
Total 6.75% + excise tax 7.55%7.55%19.65%
TOTAL SALES TAX RATES
Taxing
Authority Fort Collins Boulder Thornton Aurora Denver Commerce
City Berthoud Englewood
State 15.00%15.00%15.00%15.00%15.00%15.00%15.00%15.00%
County 0.80%1.19%0.75%1.00%0.00%0.75%0.80%0.25%
City 3.85%3.86%3.75%3.75%4.81%4.50%4.90%3.80%
City Additional 0.00%3.50%5.00%5.00%5.50%7.00%7.00%10.30%
Total*19.65%23.55%24.50%24.75%25.31%27.25%27.70%29.35%
MARIJUANA SALES TAX RATE COMPARISON
*Does not include other taxes (RTD, cultural, etc.) Page 22 of 77
7Excise Tax vs. Additional Sales Tax
•An additional sales tax on the purchase
price to the end customer
•Estimates below:
Tax Type Additional 3%Additional 5%
Alcohol*$2M+$4M+
Marijuana $3M $5M
Tobacco $1M $2M
*Liquor store estimate only
EXCISE TAX
•Excise tax on the
distributor
•Natural gas excise
tax discussion
•May CFC
ADDITIONAL SALES TAX
Page 23 of 77
82023 Timeline
Long-term Look at Possible Tax Renewals
ASSUMES 10 YEAR TERMS
20502045204020352030202520202015
YEAR
Open Space Yes
(20 yr) | 2006 -2030
KFCG
(10 yr) | 2011 -2020
KFCG.25
(10 yr) | 2021 -2030
Assume KFCG
(10 yr) | 2031 -2040
Street Maintenance
(10 yr) | 2016 -2025
Assume Street Maintenance
(10 yr) | 2026 -2035
Assume Street Maintenance
(10 yr) | 2036 -2045
Community Capital
Improvement
(10 yr) | 2016 -2025
Assume
Capital Renewal
(10 yr) | 2026 -2035
Assume
Capital Renewal
(10 yr) | 2036 -2045
Page 24 of 77
9Scenario A: $25M+
Category Funding Mechanism Annual Revenue
Estimate Stakeholder Impact
Sales Tax New ¼-Cent Sales Tax $9M+•$30.67 average per year for a resident
•Sales tax on food would remain at 2.25%
Property Tax 3 Mill Property Tax $11M+•Residential annual increase of $64.35
•Commercial annual increase of $261.00
Additional (Excise)
Sales Tax 3% Tax on Alcohol $2M+•$2 per $100 purchase in Fort Collins
•Visitors also impacted
Additional (Excise)
Sales Tax 3% Tax on Retail Marijuana $3M •$3 per $100 purchase in Fort Collins
•Visitors also impacted
Additional (Excise)
Sales Tax 3% Tax on Tobacco $1M •$1 per $100 purchase in Fort Collins
•Visitors also impacted
Total Sales Tax 4.1%$25M+•$156 net annual increase per household* +
impact of excise tax
*Assumes a household of three
IMPACT FOR A HOUSEHOLD OF THREE:
•0.32%increase at 50% Area Median Income
•0.20%increase at 80% Area Median Income
Page 25 of 77
10Scenario B: $29M+
Category Funding Mechanism Annual Revenue
Estimate Stakeholder Impact
Property Tax 5 Mill Property Tax $18M+•Residential annual increase of $107.25
•Commercial annual increase of $435.00
Additional (Excise)
Sales Tax 5% Tax on Alcohol $4M+•$4 per $100 purchase in Fort Collins
•Visitors also impacted
Additional (Excise)
Sales Tax 5% Tax on Retail Marijuana $5M •$5 per $100 purchase in Fort Collins
•Visitors also impacted
Additional (Excise)
Sales Tax 5% Tax on Tobacco $2M •$2 per $100 purchase in Fort Collins
•Visitors also impacted
Total Sales Tax 3.85%$29M+•$107.25 net annual increase per household*
+ impact of excise tax
IMPACT FOR A HOUSEHOLD OF THREE:
•0.22% increase at 50% Area Median Income
•0.14% increase at 80% Area Median Income
*Assumes a household of three
Page 26 of 77
Election Timeline Options:
11Election Timeline Options
2023 2024 2025 2026
November November NovemberNovember
•Street Maintenance and Community Capital Taxes expire Dec. 31, 2025
Parks & Rec.Renewals Climate Portfolio –
Climate, Housing, Transit
Page 27 of 77
12Council Finance Direction
QUESTIONS:
Does Council Finance
support bringing a revenue
question to the voters in
November 2023?
If yes, what type of
revenue increase
option would Council
Finance recommend?
Does Council support
pursuing the two ¼
cent renewals in 2024?
Page 28 of 77
Page 29 of 77
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Travis Storin, Chief Financial Officer
Jason Licon, Northern Colorado Regional Airport Director
Date: February 2, 2023
SUBJECT FOR DISCUSSION Airport Terminal Project
EXECUTIVE SUMMARY
The purpose of this item is to seek Council Finance Committee direction on the contractual
conditions associated with a proposed capital contribution to the Airport.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council Finance support bringing an appropriation to Council
2. If yes, which performance indicators or gates would the Committee recommend pursuing
as a condition of the capital contribution?
BACKGROUND/DISCUSSION
The Fort Collins Loveland Airport is seeking additional funding to complete their total need for
the $27M project of a new terminal facility. This new terminal will replace the inadequate,
temporary facilities used for growing multi-modal transportation segment, charters, and future
airline services. The new terminal will include two airline gates, Denver Airport transportation,
and transit access. The total cost of the project is being funded by Federal Funds ($23M),
Airport Capital Reserves ($2M), City of Loveland contribution ($1M), and seeking a City of Fort
Collins Contribution of ($1M). This will give the project the total needed to complete the work.
At the January Council Finance meeting, Committee members directed staff to identify
performance outcomes that could be attached as condition to a forgivable loan or capital
contribution. Staff has identified an array of possible performance metrics for discussion:
Condition Baseline /
Current State
Target State
1) Cities’ annual operations/maintenance
contributions 0%
(since 2019) 0%
2) Leadership in Energy and
Environmental Design (LEED) Silver
building certification
N/A Yes
3) Public art commitment at 1% of non-
federal contributions No Yes
4) Carbon Footprint of Building 236 MTCO2e 198 MTCO2e
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5) Number of annual outbound
passengers served (bus and air) 18,000 33,000
6) Enhance accessibility Partial Fully
7) Achieve regularly scheduled
commercial air service No Yes
ATTACHMENTS (numbered Attachment 1, 2, 3,…)
1. Airport Terminal PPT
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Airport Terminal Project
Conditional Capital
Contribution
02-02-2023
FNL Airport Terminal Project
Travis Storin
Chief Financial Officer
Jason Licon
Airport Director
Page 32 of 77
2Agenda
•Finance Committee Feedback
•Proposed metrics and gates
•Funding and structure
•Next Steps
Page 33 of 77
•Does the Committee support bringing the proposed addition of the Airport
Terminal Project to Council on February 7th?
•Which performance indicators or gates would the Committee recommend
pursuing in a conditional capital contribution based on the list of staff-
identified conditions or any other Committee-identified conditions?
3Council Finance Question
Page 34 of 77
4Project Information
Project Budget
Total project cost estimate: $25 million
•Phase 1 aircraft parking apron expansion: $3
million
-100% federally funded
•Terminal facility soft costs: $3.5 million
•Construction: $18.5 million
Total available funding: $25 million
•Federal funds: $21 million
•Airport capital reserves: $2 million
•City of Loveland: $1 million
•City of Fort Collins (pending): $1 million
Project Timeline
Project start: January 2021
•Public design charrettes & outreach
•Building upon Airport Master Plan adopted by the Cities in
2020
Work Completed to date:
•Aircraft parking apron expansion $3m: October 2021
•Major design change: October 2022
Remaining Work:
•Design Completion: April 2023
•Contractor Bidding & Negotiations: March -May 2023
•Construction Start: June 2023
•Construction End: October 2024
-On track to use time limited federal funds by July 2024
Page 35 of 77
•How does this project align with City priorities?
•Desire to explore performance indicators attached to a City contribution
5Council Committee Feedback
Page 36 of 77
6Strategic Alignment
Strategic Objective 3.1:
Collaborate with local and regional partners to
achieve economic resilience in Northern Colorado.
The Northern Colorado Regional Airport is an
underutilized asset that has potential to increase
regional economic competitiveness.
Strategic Objective 6.4:
Support and invest in regional transportation
connections.
The Northern Colorado Regional Airport
provides regional transit through Landline
Bus Service to DIA that reduces VMT from
the Fort Collins community to Denver.
Page 37 of 77
7Potential Metrics for City Contribution
Condition Baseline / Current State Target State
1) Cities’ annual operations/maintenance
contributions
0%
(since 2019)0%
2) Leadership in Energy and Environmental
Design (LEED) Silver building certification N/A Yes
3) Public art commitment at 1% of non-federal
contributions No Yes
4) Carbon Footprint of Building 236 MTCO2e 198 MTCO2e
5) Number of annual outbound passengers
served (bus and air)18,000 33,000
6) Enhance accessibility Partial Fully
7) Achieve regularly scheduled commercial air
service No Yes
Staff recommendation is to proceed with items 1-6 for a conditional capital contribution
Page 38 of 77
8Next Steps
•February 7 Council meeting to consider appropriation on 1st Reading, contingent
on MOU/IGA developed with agreed-to indicators and gates
•February 21 Council meeting to consider appropriation on 2nd Reading
•February 20 Deadline for final project budget to align with federal funding time limit
•March TBD Begin development of MOU/IGA for conditions attached to contribution
•June TBD Finalize MOU/IGA between Airport Commission and City Council
Page 39 of 77
•Does the Committee support bringing the proposed addition of the Airport
Terminal Project to Council on February 7th?
•Which performance indicators or gates would the Committee recommend
pursuing in a conditional capital contribution based on the list of staff-
identified conditions or any other Committee-identified conditions?
9Council Finance Question
Page 40 of 77
THANK YOU!
Page 41 of 77
Page 42 of 77
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Kira Beckham, Lead Specialist, Environmental Sustainability
Rachel Rogers, Senior Specialist, Economic Sustainability
Date: February 2, 2023
SUBJECT FOR DISCUSSION Administrative Fee and request for appropriation in the amount
of $107,251 in 2023 from the General Fund for the Residential Solid Waste Collection Program.
EXECUTIVE SUMMARY
The purpose of this item is to seek feedback on the recommended Residential Solid Waste
Collection Program administrative fee and to request an appropriation in the amount of $107,251
from the General Fund to support the start-up phase of the program.
One of the adopted Council Priorities is to explore a contracted system for garbage, recycling,
and compost collection for single family homes. On February 21, 2023, City staff will present a
draft contract and Ordinance to City Council for First Reading. By passing the Ordinance,
Council would create a new Residential Solid Waste Collection Program.
An administrative fee for the Residential Solid Waste Collection is proposed to defray City costs
to run the program. An Administrative Fee Study was done to evaluate City program costs, the
recommended fee range, and projected revenues. The recommended administrative fee is
proposed to not exceed $1.35 per household per month to ensure repayment during the contract
term.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council Finance Committee have feedback about the recommended administrative
fee of no greater than $1.35/household/month?
2. Does Council Finance Committee have feedback about the appropriation request of
$107,251 from the General Fund in 2023 to support the start-up phase of the Residential
Solid Waste Collection Program?
BACKGROUND/DISCUSSION
Fort Collins has adopted aggressive waste reduction goals, including working toward zero waste
by 2030, and has identified a stagnant residential diversion rate as one of the challenges of
making progress on that goal. Strategies to achieve zero waste are outlined in Our Climate
Future, the combined waste, climate and energy plan for Fort Collins, which can be viewed at
www.fcgov.com/climateaction/our-climate-future.
For decades, Fort Collins has utilized a licensed open market collection system. Licensing
requires haulers to report the materials collected from all sectors of the community, which is
used to calculate various diversion rates. In 2020, the Community Diversion Rate (including
residential, commercial, and industrial materials) was 52% and the Residential Diversion Rate
Page 43 of 77
was 29%. Details of Fort Collins diversion rates can be found in the annual reports at
www.fcgov.com/recycling/publications-resources.php.
To support increased waste diversion, one of the adopted Council Priorities is to explore a
contracted system for garbage, recycling, and compost collection for single unit homes.
Changing to a contracted system could help achieve the following goals:
1. Reduce the number of trucks on residential streets and achieve street maintenance savings
as well as increase safety in residential neighborhoods
2. Reduce greenhouse gas emissions
3. Increase diversion of recyclable materials and yard trimmings and encourage reuse of
bulky items as much as possible
4. Provide equitable pricing throughout the community
5. Provide cost-effective pricing for collection services
6. Provide a high level of customer service
SCOPE
The contractor would provide these core services over a term of 5 years:
1. Solid Waste collection
2. Recyclable materials collection
3. Yard Trimmings collection
4. Bulky Items collection
5. Billing
6. Customer Service
Services would be provided for all single unit residential housing and multi-family housing of
seven units or fewer that use carts for collection. The following would not be included in the
program:
• All commercial and industrial establishments and multi-unit housing containing eight (8)
or more units
• All households served by a dumpster
• Homeowners’ Associations with contracts for solid waste, recycling and yard trimmings
collection. These contracts must be effective before the effective date of the City’s
contract and comply with all applicable requirements of Chapter 12 and Chapter 15 of the
City Code
• Residential units that have been granted a variance for shared service or excess producers
as defined in Chapter 12 of the City Code
Residents that fall within this scope would be required to utilize the service or pay an opt-out fee
equivalent to the service cost of the smallest trash cart size.
The City may provide billing service in future contracts, which would require a new evaluation
of the City administrative fee and contractor pricing.
Key Milestones and Dates
• April 12, 2022 - Council Work Session
• April, June 2022 - Community Conversations
• July 12, 2022 - Council Work Session
Page 44 of 77
• July 19, 2022 - City Council passed a Resolution directing City staff to proceed with
developing a Request for Proposals (RFP) for a single hauler contracted system
• September 13, 2022 – City staff released a Request for Proposal (RFP)
• November 1, 2022 – Three haulers respond to RFP: Republic Services, Waste
Management of Colorado, and Sweetman Sanitation
• November 28, 2022 – Hauler Interviews
• December 2022 through January 2022 – Contract Negotiations
• February 21, 2023 – Staff will present the draft contract and Ordinance for First Reading
with Council at a regular meeting
• March 7, 2023 – If adopted on First Reading, Second Reading would occur on this date
By passing the ordinance in February, Council would create a new Solid Waste Collection
Service Program. Service would expect to start 12-18 months after the contract was signed.
Administrative Fee Highlights
The proposed Residential Solid Waste Collection Program includes an Administrative Fee.
Cities imposing new fees are required to demonstrate a clear connection between program costs
incurred by the City and the subject of the fee. The purpose of a fee is to defray the cost of
providing a service to the community.
The Residential Solid Waste Collection Administrative Fee Study is attached for further details
on anticipated revenues, costs, methodology, and peer community case studies.
Fee Components
To deliver on the City’s role in administering the contract, there are four primary elements that
are needed, see Table 1.
Table 1. City Roles in Administering the new Residential Solid Waste Collection Program (more
details are included in the Administrative Fee Study):
Need Key Activities
Program Management Contract administration, performance reviews, transition support for
community, grant management, lead contract renewals, staff
supervision
Customer service Answering questions from public, support billing escalation and
tracking, ready customer service software/develop tools, records
retention
Compliance Investigate complaints, check HOA compliance, check variances,
enforce contract and code, ready software/develop tools
Education, Outreach,
and Program Support
Collateral review, community communications and education, HOA
specific communications, recycling and yard waste education,
program communications
To deliver on these roles, the following estimated costs include outreach and communication,
tools and materials, and staffing. Peer communities shared that start-up and transition phases
(end of one contract and start-up of a new contract) require a larger staffing level to ensure
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quality customer service, smooth transitions for residents, an effective and efficient purchasing
process, and to communicate and educate the community on coming changes.
The estimates shown in the table below represent a summary of the range of anticipated program
costs and number of full-time equivalent staff (FTE). A contingency of 5% has been added to
overall costs to allow for inflation and unforeseen expenses. As negotiations are ongoing, these
costs are being refined by the project team and may be updated in advance of the Council
Finance Committee.
Table 2. Costs to the City for the new Residential Solid Waste Collection Program. Note:
Transition expenses are included in these annualized expenses but are averaged over the
contract term (when the City will receive revenue):
Cost description Annual cost range (low)
Assumes 2 FTE
Annual cost range (high)
Assumes 4FTE
Outreach and
communications
$31k $31k
Tools and materials $59k $59k
Mileage $3k $3k
Staffing $243k $448k
Contingency $17k $27k
Total Cost $353k $568k
Methodology for Fee Calculation
Key drivers of the administrative fee necessary to break even within the 5-year contract term:
• The staffing level required to support the program
• Repayment period
• Number of contributing households
Staffing: The transition from a licensed system (which requires less than 0.25 FTE) to a new
contracted system will require additional resources, including staffing. Table 2 includes the
estimated need of 2 to 4 FTE.
Repayment period: The repayment period for the costs shown in Table 2 has been aligned with
the contract term.
Number of contributing households: Staff has done extensive work to size the range of in-scope
households. This includes GIS mapping and analysis and HOA identification. The number of
households will be clear by the service start date but are modeled as a range based on best
information available at this time.
Fee
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Further clarity in the future: As the number of households and the necessary program costs
become clear over time, the administrative fee may be adjusted to meet the goal of covering the
program costs but not substantially accruing funds over time.
Recommended Fee Range
The estimated fee ranges from $.65 to $1.35. A conservative approach to the fee helps to
minimize risk of a lower number of households being in-scope or higher program costs. Table 3
below illustrates the range of administrative fee minimums.
Staff is recommending setting the administrative fee at $1.35 per household per month, as this
will allow revenue to cover anticipated program costs over the term of the contract. Staff will
review all fee drivers at least annually and prior to service start date to determine if a change to
the fee is warranted. Changes to the fee would require formal Council action by resolution or
ordinance.
Table 3. Minimum administrative fee levels for different levels of staffing and numbers of
households:
Requested Appropriation
An appropriation of $107,251 from the General Fund is requested to support the 2023 portion of
the start-up phase of the Residential Solid Waste Collection Program. This appropriation amount
supports both 2 FTE and 4 FTE scenarios modeled, as only 2 FTE are scheduled for program
startup, i.e., additional staffing would be added after service starts. The funding appropriated for
2023 startup costs will be repaid from administrative fees once they begin to be collected
ensuring that the City is not subsidizing the cost of this service.
ATTACHMENTS
1. Residential Solid Waste Collection Administrative Fee Study
Admin Fee Minimums
2023-2029 (5-yr contract + start-up)
Number of Households
Staffing 35,500 40,500 45,500
2 FTE $0.85 $0.75 $0.65
4 FTE $1.35 $1.20 $1.05
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Residential Solid Waste Collection Program
Administrative Fee Study
City of Fort Collins, Colorado
Contents
Executive Summary ....................................................................................................................................... 2
Study Overview ......................................................................................................................................... 2
Approach ................................................................................................................................................... 2
Fee Components ....................................................................................................................................... 2
Fee Calculation & Supported Fee Levels ................................................................................................... 2
Residential Solid Waste Collection Program ................................................................................................. 3
Fee Calculation .............................................................................................................................................. 4
Fee Study Context ..................................................................................................................................... 4
Methodology ............................................................................................................................................. 4
Program Costs ........................................................................................................................................... 5
Projected Fee Revenues ............................................................................................................................ 6
Recommended Fee Range ........................................................................................................................ 7
Start-up Appropriation .................................................................................................................................. 8
Appropriation Context .............................................................................................................................. 8
Methodology ............................................................................................................................................. 8
Recommended Appropriation .................................................................................................................. 8
Peer Community Case Studies ...................................................................................................................... 9
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2
Executive Summary
This fee study evaluates City program costs, the recommended administrative fee range, and projected
revenues. Further clarity will develop about the number of households that would be contributing to
the administrative fee, as well as the program needs. The initial administrative fee recommendation is
$1.35 per household. This administrative fee will be adjusted if necessary as additional information
comes available.
To support Program startup, an appropriation will be requested in 2023 for $107,251. Study Overview
The City of Fort Collins is considering shifting to a contracted hauling system, which would create a
Residential Solid Waste Collection Program. This fee study outlines the approach, components, and
calculations, as well as projected revenue for an administrative fee to fund the costs incurred by the City
to support and operate the Program. The study also provides case studies from peer communities that
have a contracted system for solid waste collection.
Approach
To determine the appropriate amount for an administrative fee, staff gathered information on City costs
to administer and support the program and researched similar programs implemented in other cities.
Fee Components
This study included the estimated costs to the City for:
1. Outreach and communication
2. Software and other tools
3. Staffing
4. Mileage
Fee Calculation & Supported Fee Levels
The administrative fee formula calculates a monthly fee based on estimated total cost to the City,
divided among the total volume of projected households, and repayment within the 5-year contract
term:
Using this approach, the fee supported could range from $.65-1.35 per month per household.
Transition & Service Period Program Costs / Number of residential units contributing / 60 months
= administrative fee per residential unit per month
Page 49 of 77
3
Residential Solid Waste Collection Program
The City of Fort Collins currently operates under a licensed, open market collection system. Fort Collins
wishes to build upon the existing program by adding contracted collection for households. Fort Collins
City Council has expressed support for exploring a contracted system to help achieve the following
goals:
• Reduce the number of trucks on residential streets and achieve street maintenance savings as
well as increase safety in residential neighborhoods
• Reduce greenhouse gas emissions
• Increase diversion of Recyclable Materials and Yard Trimmings and encourage reuse of Bulky
Items as much as possible
• Provide equitable pricing throughout the community
• Provide cost-effective pricing for Collection Services
• Provide a high level of customer service
If Fort Collins City Council adopts the contract and related ordinance, a new Residential Solid Waste
Collection Program (Program) would be created, to which the administrative fee revenue would be
applied. City Council is anticipated to consider contract and ordinance adoption via First Reading on
February 21, 2023, and Second Reading on March 7, 2023. The contract and ordinance would become
effective two weeks after adoption. The contracted service to residents would start September 30, 2024.
For purposes of this fee study, the time between contract adoption and service start is considered the
Transition Period. The time that the hauler is providing collection service is considered the Service
Period.
The hauler would provide the following services through the contract:
• Solid waste collection
• Recyclable materials collection
• Yard trimmings collection
• Bulky items collection
• Customer service
• Billing
Services would be provided for all single unit residential housing and multi-family housing of seven units
or fewer that use carts for collection. The following would not be included in the Program:
• All commercial and industrial establishments and multi-unit housing containing eight (8) or more
units
• All households served by a dumpster
• Homeowners’ Associations with contracts for solid waste, recycling and yard trimmings
collection. These contracts must be effective before the effective date of the City’s contract and
comply with all applicable requirements of Chapter 12 and Chapter 15 of the City Code
• Residential units that have been granted a variance for shared service or excess producers as
defined in Chapter 12 of the City Code
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4
Fee Calculation
Fee Study Context
Cities imposing new fees are required to demonstrate a clear nexus between program costs incurred by
the City and the subject of the fee, in this case the Residential Solid Waste Collection Service Program.
The purpose of a fee is to defray the cost of providing a service to the community.
Methodology
This fee study was conducted internally by the Environmental Sustainability Lead Specialist and the
Sustainability Services Senior Financial Analyst. It applies assumptions about Program costs based on the
contract and transition plan as well as leveraging fee examples from other peer communities.
Key takeaways from the fee study include:
• Direct and indirect costs include conducting a competitive purchasing process, program
management, customer service, compliance/enforcement, acquiring and implementing
software and other tools, process development, and developing and implementing education
and outreach
• Key drivers for the administrative fee cost are the level of staffing, repayment period and
number of contributing households
• Program costs begin in the Transition Period in 2023 and carry on through the 5- year Service
Period that begins September 30, 2024
• Revenues begin in the fourth quarter of 2024
• Based on the assumptions outlined within the study, the estimated fee ranges from $0.65 to
$1.35 per household per month and staff recommends establishing a fee not to exceed $1.35
per month per household to ensure repayment within the 5-year Service Period term
• Program costs are anticipated to be higher in the Transition Period and in year five of the Service
Period as staff supports another competitive purchasing process to develop the next contract
• Peer community research confirmed the direct and indirect costs of administering the Program
Related Program costs were aggregated to include both the low- and high-end estimates. This provided
the range to use as a numerator for the fee calculation below:
Transition & Service Period Program Costs / Number of residential units contributing / 60 months
= administrative fee per residential unit per month
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5
Program Costs
Program costs will begin in the Transition Period and will continue through the Service Period. City staff
are requesting an appropriation for the Program costs incurred during the Transition Period, which
would be repaid to the City during the five years of the Service Period.
The estimates shown in Figure 1 represent a summary of the range of anticipated Program costs and
number of full-time equivalent staff (FTE); a contingency of 5% has been added to overall costs to allow
for inflation and unforeseen expenses.
Figure 1. Costs to the City for the new Residential Solid Waste Collection Program:
Cost description Annual Cost range
(low)
Assumes 2 FTE
Annual cost range
(high)
Assumes 4 FTE
Outreach and
communications
$31k $31k
Tools and materials $59k $59k
Mileage $3k $3k
Staffing $243k $448k
Contingency $17k $27k
Total Cost $353k $568k
The activities anticipated to be needed to support the Program include:
• Program Administration
o Administration of the Program and administrative activities to manage the contract
• Transition Period Support
o Ensure continuity of service and high levels of customer service through support,
coordination, and planning with the contractor during the Transition Period
• Education and Outreach
o Development and implementation of web site content and campaigns to engage with
and educate residents and HOAs about the Program
o Educate about placing the correct materials in recycling and yard trimmings bins
• Compliance
o Developing the compliance plan
o Conducting enforcement of requirements in the contract and municipal code
requirements for both the contractor and the residents
o Verify eligibility of variance applications
o Verify compliance with existing requirements for HOAs with existing contracts that
would be excluded from the Program
o Potentially conduct compliance with customers who opt out of the Program
• Customer Service
o Addressing any customer service or billing escalations that are not resolved by the
contractor in a timely or satisfactory manner
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6
• Software and tools
o Purchase, development or implementation of tools, processes, and procedures to
efficiently administer, track and provide customer service, enforce compliance, and
manage the program
Projected Fee Revenues
Administrative fee revenues are based on the number of residential units contributing. City staff has
done extensive work to size the range of in-scope households, including GIS mapping and analysis and
identifying which homes are in HOAs with trash and recycling contracts. The number of residential units
will be clear by the Service Period but are modeled as a range based on best information available at this
time. The number of residential units modeled are:
• 35,500
• 40,500
• 45,500
The recommended administrative fee range accounts for the range of anticipated Program costs as well
as the range of residential units contributing. As the number of residential units and the necessary
Program costs become clear over time, the administrative fee may be adjusted to meet the goal of
covering the Program costs but not substantially accruing funds over time.
Figures 2 and 3 show the fee amount that allows for a break-even scenario for different numbers of
residential units contributing. The “break even” amounts are highlighted in green.
Figure 2: Fee amounts required to fund the low range of Program costs depending on the number of
residential units contributing; this includes startup and transition funds but is limited to the five-year
contract term when revenue will be collected
Net Revenue/(Expense) 5-yr
2 FTE Households
Admin Fee 35,500 40,500 45,500
$0.60 ($97,135) ($61,135) ($25,135)
$0.65 ($75,835) ($36,835) $2,165
$0.70 ($54,535) ($12,535) $29,465
$0.75 ($33,235) $11,765 $56,765
$0.80 ($11,935) $36,065 $84,065
$0.85 $9,365 $60,365 $111,365
$0.90 $30,665 $84,665 $138,665
$0.95 $51,965 $108,965 $165,965
$1.00 $73,265 $133,265 $193,265
Page 53 of 77
7
Figure 3: Fee amounts required to fund the high range of Program costs depending on the number of
residential units contributing; this includes startup and transition funds but is limited to the five-year
contract term when revenue will be collected
Net Revenue/(Expense) 5-yr
4 FTE Households
Admin Fee 35,500 40,500 45,500
$0.60 ($312,148) ($276,148) ($240,148)
$0.65 ($290,848) ($251,848) ($212,848)
$0.70 ($269,548) ($227,548) ($185,548)
$0.75 ($248,248) ($203,248) ($158,248)
$0.80 ($226,948) ($178,948) ($130,948)
$0.85 ($205,648) ($154,648) ($103,648)
$0.90 ($184,348) ($130,348) ($76,348)
$0.95 ($163,048) ($106,048) ($49,048)
$1.00 ($141,748) ($81,748) ($21,748)
$1.05 ($120,448) ($57,448) $5,552
$1.10 ($99,148) ($33,148) $32,852
$1.15 ($77,848) ($8,848) $60,152
$1.20 ($56,548) $15,452 $87,452
$1.25 ($35,248) $39,752 $114,752
$1.30 ($13,948) $64,052 $142,052
$1.35 $7,352 $88,352 $169,352
$1.40 $28,652 $112,652 $196,652
$1.45 $49,952 $136,952 $223,952
$1.50 $71,252 $161,252 $251,252
Recommended Fee Range
The estimated fee range to cover the Program costs that take into consideration the low and high
estimations of Program costs and number of contributing residential units ranges from $.65 to $1.35.
Figure 4 illustrates the range of administrative fees based on different Program costs and number of
contributing residential units
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8
Figure 4: Range of administrative fee amounts for low and high Program cost and revenue
Start-up Appropriation
Appropriation Context
As revenue would not begin until service commences in September of 2024, funds are needed up front
to support the City’s role in the transition from a hauler licensing system to a contracted system.
Methodology
Staff identified key startup needs to ensure a smooth transition, including customer service,
communications and outreach, customer service and compliance software, and mileage costs for
compliance. To deliver on these needs, 2 FTE (Program Manager and additional staff member depending
on which scenario is selected) will be needed in the startup phase to ensure a smooth transition; staffing
needs will be refined as negotiations are finalized and the administrative fee is set.
As with the fee calculation methodology, a 5% contingency has been added to all cost estimates.
Recommended Appropriation
Based on these needs, $107,251 will be requested with First Reading for an Appropriation in 2023; see
details in Figure 5. With service commencing in September 2024, staff has also developed initial
estimates for a 2024 appropriation, which will be refined in 2023 and requested through the mid-cycle
appropriations in Q4 of 2023. The appropriation is included in the overall fee model and will be repaid to
the City in full during the contract term.
Admin Fee Minimums
2023-2029 (5-yr contract + start-up)
Number of Households
Staffing 35,500 40,500 45,500
2 FTE $0.85 $0.75 $0.65
4 FTE $1.35 $1.20 $1.05
Page 55 of 77
9
Figure 5: Start-up appropriation costs for the requested appropriation in 2023 and the estimates for
2024; note that 2024 planning column includes estimates for the higher administrative fee
Personnel
2023
Appropriation 2024 Planning
Expenses
Personnel $43,726 $206,180
Programmatic expenses
Item 1 - Outreach and engagement $37,275 $37,590
Item 2 - Tools and Materials $26,250 $47,250
Item 3 - Mileage $0 $2,625
Subtotal of Programmatic Expenses $63,525 $87,465
Total Expense $107,251 $293,645
Appropriation 2023 $107,251 $293,645
Peer Community Case Studies
Golden and Lafayette were identified as peer communities for the following reasons:
• They are both in Colorado and so operate under the same state regulations as Fort Collins
• They both have a contracted system for solid waste collection
• They both offer services similar to those anticipated to be offered in Fort Collins
Key differences between Golden and Lafayette and the City of Fort Collins that were accounted for in
the analysis include:
• They have fewer households than Fort Collins
o Their information as converted to a per household equivalent for apples-to-apples
comparison
• They provide billing services, whereas Fort Collins plans on the contractor providing billing
o The number of FTE was adjusted to not include those dedicated to billing
Figure 6 illustrates the information gathered about Golden and Lafayette and includes the number of
FTE extrapolated out to match the number of households in Fort Collins. This fee study is not
recommending staffing at the levels represented in Figure 6, but it is shown for context.
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10
Figure 6: Information about Golden and Lafayette and the equivalent number of FTE extrapolated to
align with the number of households in Fort Collins
Golden Lafayette
Administrative Fee N/A $.70, increasing to $.90 (2023)
Needs $1.20
# of Households 4,500 7k increasing to 11k (2023)*
FTE (not inclusive of billing) 1 2
Equivalent FTE for Fort Collins
(40k households)
8-10 7-9
* Lafayette is adding 4,000 households into their program in 2023
Learnings from peer community interviews:
• Each city understaffed initially and are seeking to add staff now
• The start-up year created a heavy workload due to management of the transition, customer
service support, and collateral review
• The workload is also higher in the final year of a contract term as staff conducts a competitive
purchasing process
Page 57 of 77
Administrative Fee Study
02-02-23
Contracting
Kira Beckham, Lead Specialist, Environmental Sustainability
Rachel Rogers, Senior Specialist, Economic Sustainability
Molly Saylor, Lead Specialist, Environmental Sustainability
Caroline Mitchell, Program Manager, Environmental Sustainability
Page 58 of 77
2Questions
Does Council Finance Committee have feedback on:
•The recommended administrative fee that does not exceed $1.35?
•The requested appropriation in 2023 of $107,251 from the General Fund?
Page 59 of 77
3Strategic Alignment
City Plan
Council Priority:
Explore Districted
System for Garbage,
Recycling and
Compost
Principle ENV 5:
Create a Zero Waste
system.
Environmental Health
4.3 Zero Waste
Strategic PlanCouncil Priority Our Climate Future
Big Move 2:
Zero Waste
Neighborhoods
Aligned:
Advance Regionalism
Accelerate Composting
Improved Air Quality
Enhanced Recycling Education
Critical Path to
Achieving Climate
Goals (composting)
Page 60 of 77
4Systems for Trash and Recycling Collection
City RolePure Open
Market Each household chooses their own hauler for trash and
recycling collection. No role of local government.
Municipal
Hauling Utility
A municipality owns and operates their own hauling utility
using city staff, resources and equipment.
Open Market
with Licensing Each household chooses their own licensed hauler for trash
and recycling collection. City license can support safety
requirements and/or policy goals like including recycling.
This is Fort Collins’ current system.
Contracted
System
A municipality contracts with one or more companies to
provide residential trash and recycling collection.
This is the system under consideration.
Page 61 of 77
Contracting Application 5
Contract WOULD apply to
•Single family homes
•Multi-family complexes of 7 units or fewer
Contract would NOT apply to
•Multi-family complexes of 8 units or more
•Businesses
•Construction sites, industrial recycling
Contract MAY apply to
•Homeowner’s associations (HOAs) that contract
for trash & recycling service now
•Could opt into the City contract at end of existing contract
•City could require HOAs to join at end of existing contract
Page 62 of 77
6Timeline
Feb 21: First
Reading of
contract and
ordinance
Mar 7:
Second
reading
2023
Sept 30:
Service
and Admin
Fee starts
HOA compliance check &
program start-up
2024
Feb 2:
Council
Finance
Committee
2022
April 12: Council
Work Session
April, June:
Community
Conversations
July 12:
Council Work
Session
July 19:
Resolution
directing RFP
Sept 13: RFP
released
3 haulers
respond to
RFP
Hauler
interviews
Dec thru
Jan:
Contract
negotiations
Phase 1:
public
engagement
We are Here
Page 63 of 77
Administrative fee
•Collected by hauler and remitted to the City
•Would be collected when service starts (anticipated Q4 2024)
•Revenue would be predictable and ongoing
Fee Study
•Documents the City’s costs for the program
•Is the basis for the Administrative Fee amount
Fee Study Approach
•Developed estimated program needs & costs
•Leveraged peer communities' research
•Estimated number of residential units that would be contributing
•5-year repayment of start up costs (to align with the contract term)
7Administrative Fee Overview and Approach
Page 64 of 77
8Peer Community Case Studies
Golden Lafayette
Administrative Fee N/A $0.70 $0.90 (2023)
needs $1.20
# of Households 4,500 7,000 11,000 (2023)
FTE
(not inclusive of billing)
1 2
Equivalent FTE for Fort Collins
(40k households)
8-10 7-9
Key takeaway: Each city understaffed initially and are seeking to add staff now
Other Learnings:
• Start-up year will be heavy work with management of transition, customer service support, collateral review
•Transition years will be heavy with the RFP/contract renewal process
Page 65 of 77
Four Key Elements:
Note: Needs vary depending on contract stage, e.g., startup phase will require more community outreach and every five
years, a transition to a new contract will also require higher resourcing; more info in the Administrative Fee Study.
9City’s Role in Administering the Contract
Need Key Activities
Program Management Contract administration, performance reviews, transition support for
community, grant management, lead contract renewals, staff supervision
Customer service Answering questions from public, support billing escalation and tracking,
ready customer service software/develop tools, records retention
Compliance Investigate complaints, check HOA compliance, check variances,
enforce contract and code, ready software/develop tools
Education, Outreach, and
Program Support
Collateral review, community communications and education, HOA
specific communications, recycling and yard waste education,
program communications
Page 66 of 77
10Estimated Program Costs for City
Key Takeaway: Staffing is the largest cost driver
Also: repayment period, number of contributing households
Note: Transition expenses are included in these annualized expenses but are
averaged over the contract term (when the City will receive revenue)
Cost Description Annual cost range (low)
Assumes 2 FTE
Annual cost range (high)
Assumes 4 FTE
Outreach and Communication $31k $31k
Tools and Materials $59k $59K
Mileage $3k $3k
Staffing $243k $448k
Contingency $17k $27k
Total Cost $353k $568k
Page 67 of 77
11Staffing Proposals to Deliver City’s Roles
Baseline Ideal
Fee level
(per hh/mo)
$0.85 $1.35
FTE 2 Staff Members
•Program Manager
•Compliance / Customer Service
4 Staff Members
•Program Manager
•Compliance
•Customer Service
•Program Specialist (Engagement and Outreach)
Benefits •Lower admin fee
•Provides baseline new staffing needed
•Greater ability to facilitate smooth roll-out
•Allows for existing work to continue
•Classified staff for known program needs, contractual for
likely program needs
•Allows roles to be more specialized
Impacts to current
work
•Moderate delays (~ 6 mo)•No negative impact
Drawbacks
& Risks
•Lower margin of error –minimal staffing
•Combines compliance and customer service skill
sets in one role
•Impacts existing work plans, e.g., communication
and engagement staffing
•Utilize metrics to know if staffing levels too low
•Higher admin fee
•Increased expenditures
Revisit staffing at •Two years (start-up)•Five years (contract renewal) Page 68 of 77
Key takeaway: By setting the Administrative Fee conservatively, it ensures repayment
within the 5-year contract term and avoids needing to increase the fee within the contract
term
12Administrative Fee Calculation & Recommendation
Admin Fee Minimums
2023-2029 (5-yr contract + start-up)
Number of Households
Staffing 35,500 40,500 45,500
2 FTE $0.85 $0.75 $0.65
4 FTE $1.35 $1.20 $1.05
Staff Recommendation: Setting the administrative fee at no higher than $1.35
Page 69 of 77
132023 Appropriation and 2024 planning
Staff requests $107,251 appropriation from the General Fund in 2023 to
support the start-up phase of the Residential Solid Waste Collection Program
2023 Appropriation 2024 Planning
Expenses
Personnel $43,726 $206,180
Programmatic expenses $63,525 $87,465
Total Expenses $107,251 $293,645
Appropriation 2023 $107,251 $293,645
Page 70 of 77
14Next Steps
Next Steps
•First week of February -Additional details made publicly available on the Contract
•First Reading February 21
•Contract
•Appropriation
•Ordinance updates
•(If adopted) Second Reading March 7
Page 71 of 77
15Questions
Does Council Finance Committee have feedback on:
•The recommended administrative fee that does not exceed $1.35?
•The requested appropriation in 2023 of $107,251 from the General Fund?
Page 72 of 77
17
BACKUP
Page 73 of 77
18Market share of trash and recycling in Fort Collins, based on revenue
Single
Family
Homes
20%
Contracted
HOAs 10%
Construction and
Demolition Sites
29%
Multi-Family
and
Commercial
42%
Sectors Serviced by Haulers
in Fort Collins
Page 74 of 77
Role Staff Primary Focus Related Council Priority
Manager Regional Wasteshed
Team management
Composting
Lead Specialist Plastic Pollution, Circular Economy
Our Climate Future
Plastic Pollution
Circular Economy
Lead Specialist Policy development Contracted Hauling
Environmental Compliance Construction & demo recycling Construction & Demo Recycling
Environmental Compliance All other environmental compliance Multi-Family and Commercial Recycling
Senior Specialist Community engagement Recycling Education
Senior Specialist Implementation of plastic pollution
reduction (2 yr position)
Plastic Pollution
Operations Technician Timberline Recycling Center
Program Assistant General program support
19Current WR&R Staffing
Full time Part Time/Hourly Full time contractualPage 75 of 77
20Contracting vs Open Market
M M M M M M M M
M W T F F M TW
Open Market System: multiple haulers, serviced on different days of the week
Contract System: single hauler, serviced on same day of the week
Page 76 of 77
•Ideal: Recommend staffing at 4 FTE
•Ensures continuity of current work streams and
delivers high customer service experience for the
program
•Baseline: Staff at 2 FTE
•Evaluate staffing levels every 2 years
•Monitor key triggers that signal additional headcount
is needed to deliver a high customer service level
•Not recommended: No new staff
•Allocate the equivalent of 1 FTE from current WR&R
staff by delaying or removing other priorities
•This is not recommended given impact to current
work streams and risk of a poor customer service
experience for the program
21Staffing Scenarios and Appropriations Impact
Personnel (1 FTE existing)
2023
Appropriation 2024 Planning
Expenses
Personnel (no new staff)$0 $0
Programmatic expenses $63,525 $87,465
Total Expense $63,525 $87,465
Appropriation 2023 $63,525 $87,465
Personnel (2 FTE new)
2023
Appropriation 2024 Planning
Expenses
Personnel $43,726 91,711$
Programmatic expenses $63,525 $87,465
Total Expense $107,251 $179,176
Appropriation 2023 $107,251 $179,176
Personnel (4 FTE new)
2023
Appropriation 2024 Planning
Expenses
Personnel $43,726 206,180$
Programmatic expenses $63,525 $87,465
Total Expense $107,251 293,645$
Appropriation 2023 $107,251 $293,645
Page 77 of 77