HomeMy WebLinkAbout058 - 06/07/2022 - APPROPRIATING PRIOR YEAR RESERVES IN THE LIGHT & POWER FUND FOR PURCHASE OF DISTRIBUTION AND SUBSTATORDINANCE NO.058, 2022
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE LIGHT & POWER FUND FOR
PURCHASE OF DISTRIBUTION AND SUBSTATION TRANSFORMERS
WHEREAS, the budget needs for Electric Utility Distribution System infrastructure
replacement projects requested in the 2022 Budgeting for Outcomes (BFO) process included all
known capital projects at that time; and
W1 iEREAS, recent changes in supply markets and increased load growth create a need for
the Electric Utility to accelerate orders for replacement distribution and substation infrastructure;
and
WHEREAS, the current funding shortfall between the approved Electric Distribution
System infrastructure replacement projects requested in the 2022 BFO process and currently
identified needs is due to unanticipated load growth -related projects, escalating materials and
construction costs, and significantly longer manufacturer order fulfillment lead times; and
WHEREAS, this Ordinance appropriates $3,666,000 from the (Electric Utility Enterprise)
Light & Power Fund reserves to be spent in the Electric Distribution System Replacement project
to accelerate ordering of planned replacement distribution and substation transformers to address
current and emerging market conditions that may compromise replacement schedules or delay
planned expansion projects; and
WHEREAS, this supplemental appropriation benefits the public health, safety and welfare
of the residents of Fort Collins and benefits Electric Utility ratepayers by proactively ordering
stock for use in completing scheduled and emerging replacement of high -use infrastructure and
installation of new substation facilities in growth areas in order to maintain reliability and reduce
outage frequency; and
WHEREAS, Utilities staff believes proactively placing orders for such equipment earlier
than initially planned will capture currently lower supply and construction costs than those
anticipated in coming budget cycles and accommodate longer market order lead times, allowing
Utility Services to receive such equipment by planned replacement or installation dates and
maintain its high service standards; and
WHEREAS, in 1995, the City Council adopted Article XII of City Code Chapter 23 to
establish a program to acquire, exhibit and maintain art in public places to be funded by including
in the Council's appropriations for certain capital projects an amount equal to 1% of the
construction costs for those projects, but this contribution amount for the City's utilities is limited
to a total annual contribution amount of 0.5% of each utility's "budgeted operating revenue" (the
"APP Ordinance"); and
WHEREAS, contributions to art in public places for each utility are kept and spent in such
utility's own enterprise fund, with the exception of maintenance, administration, repair and display
costs pursuant to City Code Section 23-303; and
WHEREAS, this supplemental appropriation does not require a contribution for art in
public places under the APP Ordinance, as distribution and substation transformers are
traditionally capitalized at the time of purchase as "operation and maintenance" expenses for
Utility facilities, rather than when they are placed into service, even if they become components
of capital projects; therefore, purchase of such equipment is exempt from the contribution
requirements of the APP Ordinance; and
WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the
recommendation of the City Manager, to make supplemental appropriations by ordinance at any
time during the fiscal year such funds for expenditure as may be available from reserves
accumulated in prior years, notwithstanding that such reserves were not previously appropriated;
and
WHEREAS, the Interim City Manager has recommended the appropriation described
herein and determined that this appropriation is available and previously unappropriated from the
Light & Power Fund and will not cause the total amount appropriated in the Light & Power Fund
to exceed the current estimate of actual and anticipated revenues and all other funds to be received
in this Fund during this fiscal year; and
WHEREAS, Article V, Section I of the City Charter authorizes the City Council to
designate in the ordinance when appropriating funds for a capital project, that such appropriation
shall not lapse at the end of the fiscal year in which the appropriation is made, but continue until
the completion of the capital project; and
WHEREAS, the City Council wishes to designate the appropriation herein for the capital
project consisting of the purchase of distribution and substation transformers as an appropriation
that shall not lapse until the completion of the project.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated from prior year reserves in the Light &
Power Fund the sum of THREE MILLION SIX HUNDRED SIXTY-SIX THOUSAND
DOLLARS ($3,666,000) to be expended in the Light & Power Fund for the capital project
consisting of the purchase of distribution and substation transformers.
Section 3. That the appropriation herein for the capital project consisting of the
purchase of distribution and substation transformers is hereby designated, as authorized in Article
V, Section 11 of the City Charter, as an appropriation that shall not lapse at the end of this fiscal
year but continue until the completion of the project.
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Introduced, considered favorably on first reading, and ordered published this 17th day of
May, A.D. 2022, and to be presented for final passage on the 7th day of June, A.D. 2022.
May
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City Clerk ,ry �.
Passed and adopted on final reading
ATTEST:
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City Clerk,
SEAL
day of June, A.D. 2022.
May� 4�dlt_
52