HomeMy WebLinkAbout1982-139-10/05/1982-ADOPTING THE FINANCIAL AND MANAGEMENT POLICIES RELATING TO THE 1983 FINAL BUDGET RESOLUTION 82-139
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THE FINANCIAL AND MANAGEMENT
POLICIES RELATING TO THE 1983 FINAL BUDGET
WHEREAS, the City Manager and City Council have reviewed various
financial and management policies in conjunction with the annual budget
process and five year plan, and
WHEREAS, the City of Fort Collins is committed to sound financial
planning and direction, and
WHEREAS, these policies form the basis for various decisions affecting
the 1983 final budget, and
WHEREAS, City Council wishes to formally adopt these financial and
management policies in conjunction with the adoption of the budget ending
fiscal year 1983
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the following financial and management policies be, and the
same hereby are, adopted as the basis for the resolution adopting the 1983
Budget for the City of Fort Collins
1 CATEGORIZATION OF CITY SERVICES
In 1981 , the City Council categorized all City services in order to
set priorities for allocating available money These categories are
Basic or Core Services - these are services that are best performed at the
local level and are most closely linked to protecting the health and safety
of the citizens Legally mandated services or commitments are also included
in this category
Maintenance of Effort Services - these are services which the City has
traditionally -provided or which reflect a major capital investment re-
quiring an expenditure of funds to maintain
Quality of Life - these are activities which are provided for more spe-
cia ize groups and enhance the desirability of Fort Collins as a place to
live
These categories were applied to City services in the following manner
Basic or Core Services
Police
Fire
Water and Sewer
Light and Power
Storm Drainage
Streets
Debt Payments
Maintenance of Effort Services
General Administrative
Services
Park Maintenance
Cemeteries
Transfort
Street Lighting
Open Space
Facilities
Engineering
Airport
Internal Service
Activities
Quality of Life
Library
Recreation
Museum
Lincoln Center
Golf
Community Services
2 SALES TAX DISTRIBUTION
Background
As part of the 1983 budget process, City Council recommended the addition
of 75 of a 14 sales tax to provide increased financing for the City' s
current capital requirements
Action
Based upon City Council direction to increase the sales and use tax
by 75 of 14 for 1983, the sales tax distribution policy is
SALES TAX DISTRIBUTION
TOTAL
1¢ 1¢ 1/40 3/40 DISTRIBUTION
1968 1980 1982 1983 PER 10
Seven Year Capital
Program Operation &
Maintenance -- 30% -- -- 30%
General Fund 100% 25% -- 6%* 131%
Transfort -- 10% -- -- 10%
General City Capital
Improvements -- 6% 25% 69% 1000%,
Street Debt Service -- 25% -- -- 25%
Reserves -- 4% -- -- 4%
TOTAL 100% 100% 25% 75% 300%
*Includes Sales Tax Rebate Program and increase in Social Service Agency
Contributions
The debt service for streets is to pay for the street rehabilitation
and new construction program from 1980-1982 As the debt service payments
decrease, the difference between the debt service and the revenue generated
by 1/40 sales and use tax will be allocated to the General Fund
3 WATER AND SEWER UTILITIES
Formally adopted financial policies are an important factor in plan-
ning the financial operations of the Water and Sewer Utilities Neither of
the utilities has had the advantage of utilizing a comprehensive set of
policies in the past Comprehensive financial policies should include
statements concerning
o Net Income Requirements
o Capital Cost Financing
o Reserve Requirements
o Rate Requirements
Policy statements have been developed for each area listed above and
incorporated into the 5-year Water and Sewer financial plan
NET INCOME
The net income of the Water and Sewer Utility shall be at least equal
to the annual cost of the following
- Principal reductions of outstanding bonds
- Loan repayments to Federal or State agencies
- Annual operating reserve increases
RESERVES
The following reserves shall be established and maintained in the appli-
cable utility
- Operating reserve at least equal to 2% of the projected annual
operating revenue
- Plant Investment Fee reserve equal to the annual fees less annual
cost allocated to System Expansions
- Capital reserve equal to the amount of bond proceeds available
at the end of one fiscal year to be expended in the next fiscal
year
- Debt reserve equal to the amount required by individual bond
ordinance
RATE REQUIREMENTS
Utility rates shall be set at a level to provide for the net income
requirement in each fiscal year Levelized rate increases are preferred and
should be achieved through levelized expenditures
CAPITAL COST FINANCING
Annual capital cost shall be identified as one of three types
1 Normal replacement of the existing system
2 System improvements that benefit the existing and future popula-
tion (Systems Improvements)
3 System expansions that benefit future populations ( Systems
Expansion)
Normal replacements shall be financed on a Pay-As-You-Go basis from a
reserve for depreciation funded from current rates
System improvements shall be debt financed over the life of the improvement
and the annual debt service shall be funded from current rates
System expansion shall be funded on a Pay-As-You-Go basis from a combina-
tion of Plant Investment Fees and Contributions In Aid of Construction
Federal and/or State grants may be utilized to fund portions of or all
of capital costs
4 CAPITAL IMPROVEMENT POLICY
Currently, the City of Fort Collins operates under the following Capital
Improvement Policy
1 The City will develop a multi-year plan for capital improvements
and update it annually
2 The City will make all capital improvements in accordance with the
adopted Capital Improvements Program and the Capital Project
Management Control System
3 The City identifies estimated costs and funding sources for
each capital project requested before it is submitted to City
Council
4 The City uses intergovernmental assistance to finance only those
capital improvements that are consistent with the Capital Improve-
ment Plan and City priorities and whose operating and mainte-
nance costs have been included in the operating budget forecasts
During the budget process, an overall strategy was developed to give
direction on how capital projects should be financed based upon the
different types of capital improvements These projects ( excluding
Water and Sewer) have been categorized as
0 Replacement - capital expenditures relating to normal replacement
of worn or obsolete capital plant
0 Expansion - capital expenditures relating to the construction of
new or expanded facilities necessitated by growth
0 Unusual - capital expenditures for improvement that enhance the
quality of life in Fort Collins and are consistent with the City' s
goals, but cannot be categorized as essential for the provision of
basic services or maintenance of life
The overall policy developed to finance capital improvements (excluding
Water and Sewer) addresses these three categories
REPLACEMENT
In general , capital expenditures relating to the normal replacement of
worn or obsolete capital plant will be financed by reserving an amount
of annual working capital provided from depreciation These projects
will be financed on a Pay-As-You-Go basis with debt financing considered
where appropriate The formula for computing the amount of reserves for
capital replacement will be integrated with the current Capital Reserve
Policy and Debt Financing Policy In those funds in which depreciation is
not accounted for, a method for calculating the annual depreciation of
replaceable assets will be developed in order to reserve an amount of
annual working capital for replacement
EXPANSION
The present policy concerning capital plant expansion relates to new growth
and will continue in effect This policy directs that these capital expend-
itures be financed primarily by new development in the form of development
fees, plant investment fees, and contributions-in-aid-of-construction
These projects will be financed primarily on a pay-as-you-go basis but when
the City' s share of the new improvements can be determined to benefit the
overall population in the future, debt financing may be appropriate This
policy will be integrated with the City' s present Capital Reserves and Debt
Financing Policies
UNUSUAL
The policy relating to unusual capital expenditures directs the City to
look to the ultimate beneficiary of each capital improvement in order to
determine the source of funding As projects are identified, they will be
funneled through a decision process in order to
0 determine whether projects are acceptable from the point of view of
municipal goal achievements or cost benefit analysis
0 evaluate each capital projects' relevant cash flow in order to
determine if a project is financially viable
0 prioritize capital improvements based upon these findings
5 RESERVE POLICY
Formally adopted reserve policies are an important factor in maintaining
the City of Fort Collins in good fiscal health Reserve policies have been
formally adopted by Council for the three utilities, however, prior to the
1981 budget such policies did not exist for other funds of the City
There are three primary types of reserves
0 Operating Reserves
0 Capital Reserves
0 Debt Reserves
The degree of need for these reserves differs based upon the type of fund
or operation involved However, one policy statement for each type of
reserve can be uniformly applied to all funds
OPERATING RESERVES
There are two types of operating reserves
1 An appropriated contingency which provides for unexpected or
unanticipated expenditures during the years
This is the amount of contingency budget, normally stated as part
of the operating budget
2 Revenue reserve of working capital is established to provide for
unforeseen revenue losses If something happens to the economy,
there is flexibility without worrying that current expenditures
will exceed the total revenue available
These reserves are not appropriated as part of the annual budget
but are utilized at the end of the fiscal year, if necessary The
amount of reserve is based upon potential revenue loss that would
most probably occur in a given fund
CAPITAL RESERVES
Capital reserves are established in order to provide for normal replacement
of existing capital plant and additional capital improvements financed on a
Pay-As-You-Go basis
The amount of the reserve is determined by averaging the dollar value of
capital needs as shown in the Capital Improvement Program
A second type of capital reserve is an appropriated capital contingency,
which provides for the conceptual study and preliminary design of unan-
ticipated capital improvements
Debt financed capital improvements by definition are financed by the
proceeds of bond issues and do not require capital reserves
DEBT RESERVES
Debt reserves are established to protect bond holders from payment de-
faults Adequate debt reserves are essential in maintaining good bond
ratings and the marketability of bonds
Debt reserves are established by bond ordinance and normally provide
for a reserve equal to one-half of the average annual outstanding debt
service requirement
The reserve policy recommended that has been included in the 1982 budget
and five-year plan is as follows
The City will establish and maintain
OPERATING RESERVES
0 Equal to 2% of the annual operating expenditure budget by fund, to
protect against unanticipated expenditures,
0 Equal to 2% of projected annual operating revenue by fund, for the
purpose of protecting against unexpected revenue losses,
CAPITAL RESERVES
0 Equal to the annual average of the five year projected additions
for the replacement and additions to the existing capital plant,
financed on a pay-as-you-go basis, for the purpose of providing
for capital improvement needs of the City,
0 Equal to 5% of the amount annually appropriated for capital con-
struction, for the purpose of providing for the costs of prelim-
inary study and design, and
DEBT RESERVES
0 Debt reserves as required by market conditions in concert with each
debt issued and established by bond ordinance
These policy statements are intended to apply to the various funds of
the City , however, it is recognized that various Federal , State, and
local laws and regulations, and specific financial policies may supercede
this reserve policy
6 DEBT POLICY
In 1981, the City of Fort Collins adopted the following debt financing
policy
POLICY STATEMENT
The City of Fort Collins will use debt financing when it is appropriate It
will be judged appropriate only when the following conditions exist
1 When non-continuous capital improvements are desired
2 When it can be determined that future citizens will receive a
benefit from the improvement
When the City of Fort Collins utilizes long-term debt financing it will
ensure that the debt is soundly financed by
1 Conservatively projecting the revenue sources that will be uti-
lized to pay the debt
2 Financing the improvement over a period not greater than the
useful life of the improvement
3 Determining that the cost benefit of the improvement, including
interest cost, is positive
Additionally, the City has the following policies in relation to debt
financing
1 Total general obligation debt will not exceed 10% of assessed
valuation in accordance with the City Charter
2 Where possible, the City uses special assessment, revenue, or
other self supporting bonds instead of general obligation bonds
3 Fort Collins maintains good communications with bond rating
agencies about its financial condition
The 1983 Budget includes debt service payments and reserve requirements for
all debt currently outstanding for all proposed debt issues
7 INVESTMENT POLICY
In conjunction with the report on the Financial Condition of the City
of Fort Collins, 1981 , a number of financial management policies were
considered, including Investment Policies
The City of Fort Collins has operated under informal Investment Policies
which were requested by City Council to be formalized
The City of Fort Collins will follow Investment Policies which state
1 The City will continue to analyze the cash flow of all funds on a
regular basis to ensure maximum cash availability
2 In order to obtain the best possible return on all cash invest-
ments, the City will continue to pool cash from several different
funds for investment purposes
3 Market conditions and investment securities will continue to be
analyzed on a daily basis to determine the maximum yield to be
obtained
4 The City will continue to invest at least 99% of its idle cash on
a continuous basis
5 The City will invest in quality issues and will comply with City
Charter and State Statutes regarding investment requirements
8 REVENUE POLICY
Generally, the City reviews estimated revenue and fee schedules as part of
the budget process Estimated revenue is conservatively projected for five
years and updated annually Proposed rate increases are based upon
0 Fee policies applicable to each fund or activity
0 The related cost of the service provided
0 The impact of inflation in the provision of services
0 Equitability of comparable fees
A Revenue Policy for the City of Fort Collins would include the existing
informal policies with the addition of
0 The establishment of a diversified and stable revenue system
to shelter the City from short run fluctuations in any one revenue
source over the next two years
The effect of developing an overall City Revenue Policy has been
0 Adoption of financial policies for the Water and Sewer Funds
regarding net income requirements, capital cost financing, reserve
requirements, and rate requirements
0 Rate increases for various fees and services provided by the City
9 PARKS AND RECREATION FEES
In 1981, the City Council adopted the following fee policy for Parks and
Recreation
1 The Recreation Division shall recover a minimum of 50% of its
total cost in revenue generated through fees and charges
2 Total direct revenue from all Recreation programs shall not fall
below a 100% recovery of total direct costs
3 Categories have been created for the Recreation programs in
order to evaluate which programs must cover total or partial
expenditures These categories are
A Total Support
1 Sports
2 Dance and Fitness
B Partial Support
1 Aquatics
2 Outdoor Recreation
3 Arts and Crafts
4 Special Interests
C Minimal Support
1 Senior Citizens
2 Special Events
3 Therapeutics
4 Youth Centers
5 Northside Recreation
Total revenue from fees and charges shall cover a minimum of 80%
of "Total" and "Partial" support program costs The difference
between 80% and 100% will be supported by the General Fund as well
as for those programs requiring minimum support
4 Revenue generated from rentals, concessions, and other miscella-
neous sources shall be considered an equal priority with class
registrations when establishing fees and charges
5 The Recreation Division shall provide designated programs for
senior citizens and developmentally disabled persons at 1/2 the
established fee and to low-income citizens at 1/3 the established
fee
6 The Recreation Division shall charge rental for rooms, pool time,
gym, ball field, and special equipment, as specified in written
policies
7 An admission fee shall be charged at the Northside Community
Center for use of the weight room, locker room, and gym, during
drop-in hours
8 Solicitation of funds through donations, fund raising events,
non-traditional sources, and various other needs shall be encour-
aged by the Parks and Recreation Advisory Board and City Council
Funding collected for any special purpose shall be earmarked for
that purpose, and the utilization of foundations for the further-
ance of this goal shall likewise be encouraged
The proposed 1983 Recreation Budget and fees have been developed utilizing
the policy as adopted for 1981
10 GENERAL FUND FEES AND TAXES
A number of miscellaneous licenses and taxes have not been reviewed
for the last three years As a result of the Revenue Policy, these fees
were analyzed for equitability, comparability, and cost recovery rates for
1982 and have been updated for 1983
Telephone Franchise Fee was last negotiated with Mountain Bell in 1978 when
a rate per account was established Generally the City' s franchise fees
have increased by at least the rate of inflation, with the exception of the
Telephone Franchise Fee
Amusement Licenses are comprised of operator licenses for game machines,
theatres, dance halls, and bowling alleys The purpose of the license is
for the City to control and be advised of these activities and provide
additional policing as required The fees for these licenses were estab-
lished in 1959 and have not been adjusted since that time
Miscellaneous Licenses include licenses for operations that the City
has determined to require certain restrictions and specific require-
ments The various fee schedules for miscellaneous licenses have not
been adjusted since 1976 even though certain activities impact the cost of
City services
In conjunction with the Revenue Policy , miscellaneous fees and taxes
should be reviewed annually to determine rates and fee schedules for
the coming year As these revenue items have not been changed for at
least three years, significant rate increase are included in the 1982
budget
Additionally, there appears to be inequity in fees charged for amuse-
ment and miscellaneous licenses In order to minimize the discrep-
ancies and simplify the administration of these licenses , a Business
License has been included to replace the current Amusement and Miscel-
laneous License categories
Business License - Class I would be used for licenses designed to ensure
the qualifications and liability insurance coverage of the applicant as
well as protect the rights of the general citizenry The licenses have
minimal impact upon the City' s cost of administering and monitoring these
licenses
Business License - Class II would be used to ensure the qualifications
of the applicant, to provide more control of the scope or hours of opera-
tion, and recover the increased police, street, or administrative costs
involved with monitoring these operations
The General Fund estimated revenue based upon these fee adjustments are
included in the Annual Budget
11 PAYMENT-IN-LIEU-OF-TAXES
In accordance with the City Charter regarding utility accounts, the
City charges an estimate of the amount of property taxes and franchise
fees that would be charged to each utility if owned privately Currently,
the City levies a payment-in-lieu of taxes (P I L 0 T ) against the
Water, Sewer, and Light and Power utilities
In 1981, City Council approved a policy to reduce the rates of contri-
bution to the General Fund by each of the utilities in an effort to
0 establish a rate more comparable to the rate that would be charged
if privately owned, and
0 provide a more consistent rate for all utilities
A five year program to achieve this objective was adopted for 1981
The City Council set the PILOT rates for 1982 to achieve the objec-
tives established in 1981 As a result, the PILOT rates for the Water,
Sewer, and Light and Power utilities will be 5% of operating revenues
per year for each utility This policy reduces the amount of income
the General Fund will receive from the Water and Sewer Funds for 1982
This reduction has been incorporated in the General Fund 1982 Budget
In conjunction with the 1983 Recommended Budget, payments-in-lieu of taxes
from the Light and Power Fund will be adjusted by the cost of street-
lighting within the City This accounting adjustment will not impact the
projected ending fund balance in the General Fund or Light and Power
Fund
12 ADMINISTRATIVE CHARGES
The General Fund provides services to all funds requiring a formula
for the allocation of Administrative Charges The formula approved in
1981 is
0 Allocation of 50% of the cost based upon the ratio of each fund' s
budget (operation, maintenance, and capital) to the total City
budget, and
0 Allocation of 50% of the cost based upon the number of City employ-
ees in each fund to the total number of City employees
This policy was applied to all funds in 1982 with the exception of those
funds which are subsidized by the General Fund
13 ENTERPRISE FUNDS
The City currently has nine Enterprise Funds They include Cemeteries,
Golf, Light and Power, Lincoln Center, Performing Arts, Sewer, Storm
Drainage, Transfort and Water The Enterprise Fund classification has been
used to account for various services for which there exists a significant
potential for financing through user charges In many of these funds a
subsidy from the General Fund has been necessary to cover operating ex-
penses Historically, services were accounted for in an enterprise fund
only if they were financed more than 50% by user charges In the proposed
1982 budget, there are two funds which do not meet this 50% level The
Lincoln Center expenditure total for 1982 is $421,101 Anticipated revenue
for 1982 is projected at $183 ,665 The user fee revenue coverage is
therefore 44% Transfort is the other fund which does not cover at
least 50% of its expenses with user fees In 1982, total expenditures
are projected at $660,538 and user fee revenue is projected at $139,000
The user fee revenue coverage is 21%
There has been a nationwide trend towards the regulation of the demand
for governmental services through user fee mechanisms The Fort Collins
City Council supports this concept The long term goal of all enterprise
accounts is self sufficiency Towards this end, those funds which are not
presently self sustaining shall incrementally adjust their rate structures
to achieve a positive income position
Those operations which cannot achieve a positive income position within a
five year timeframe, shall be accounted for as subsidized operations and
not as Enterprise Funds beginning in 1983 This does not mean that these
operations will not continue to rely heavily on user fees to help support
their operations Revenue/ expense accounting will be provided through
customized monthly statements to indicate their income/disbursement posi-
tion
The 1983 Budget accounts for the Transfort operation and the Lincoln Center
as part of Special Revenue Funds
14 ENERGY
The City recognizes a three-part responsibility in energy management
and conservation As a consumer with 64 buildings, 350 vehicles, and
750 employees, the City strongly encourages building retrofits, alternate
fuels, and changes in operating practices which will save the City money or
enable it to benefit from new technologies
As the operation of an electric utility and a member of a power generation
cooperative, the City is an energy provider City Council is therefore
interested in helping its consumer public reduce the energy it uses
City Council , recognizing certain responsibilities for leadership and
regulation which are inherent in local governments, is willing to shoulder
some of the risks which innovation and being first in the field entail
Towards these ends, the City Council will look for implementation of the
following programs and policies
1 The in-house Energy Management Program will continue to hold a
high priority The decentralized approach has worked well and
because this strategy promotes more innovation and greater depart-
mental involvement, it remains the preferred approach
2 The principal goal of the program is cost savings To this end, a
minimum of $150,000 will be set aside each year for the next five
years for energy conservation retrofit work in City facilities
3 Whenever possible, and to the extent practical , life cycle costing
will be used in developing bid specifications and awarding con-
tracts
4 The greatest long-term benefits from energy conservation will
result from broad participation by the community To encourage
this participation, a community education program will be devel-
oped It will address consumer awareness, the impacts of conserva-
tion, and other information the community will need to deal with
energy issues Like all elements of the Energy Management Program,
this segment will be addressed by departments and coordinated
through the City Manager' s Office
5 To further encourage energy conservation, City Council will
look for ways to utilize community resources for community prob-
lems The zero interest loan program is one example
6 City Council recognizes the important role of the private sector
in long-term energy conservation and will take steps to be in-
volved with the community in a way which encourages energy conser-
vation in building design and community layout
7 In 1982, a community energy audit will be made This audit will be
designed to provide staff and policy makers the kinds of program
choices which can have the greatest impact on the community, so
that dollars invested in conservation can have the fullest effect
8 The alternate fuels program will be contrived and expanded,
insuring operating cost savings and a reduction of vulnerability
to foreign oil reliance
15 TRANSFORT
BACKGROUND
The current Transfort System is financed by
0 A contract with CSU
0 User fees (non-CSU)
0 A General Fund operating subsidy
Additionally, the City received a federal Urban Mass Transit Grant of
$3 ,630,960 to construct a maintenance facility and replace four buses with
the City' s matching share being $907 ,740 in 1982
ACTION
The City will work towards establishing a Quality Transfort System as
soon as is practicable (1983 or later) , to be phased in as funds become
available Such a system could provide for the following
0 Nine buses serving 85% of the community and all major service
areas at reasonable intervals
0 Operation of the system 14 hours per day, 6 days a week
0 Operation of a downtown shuttle
0 Partial funding by fares
Working towards the Quality Transfort System, the City designates Transfort
to be an essential service to all the community, and will pursue coordina-
tion efforts with Care-A-Van and the School District, grant awards, and
increased fees through advertising and contracts
The 1983 Budget includes the expansion to a nine (9) bus system in 1983
16 STORM DRAINAGE
In accordance with the City' s continuing commitment to provide storm
drainage lines and facilities within subdivided and developing areas
of the City , the Storm Drainage Utility was established in 1980 for
the purpose of paying for the cost of capital construction and for the
associated operating and maintenance costs of the Storm Drainage Program
A monthly storm drainage utility fee was implemented in 1981 to provide
financing for operation and maintenance costs
In past years, funding for capital construction and development of basin
master plans was provided by the Seven Year Capital Fund With Seven Year
Capital monies expended, alternative financing for capital improvements had
not been identified
In order to address the storm drainage capital needs, the City has devel-
oped master plans of storm drainage capital requirements for each basin In
an effort to balance storm drainage risk and liability, the Storm Drainage
Board has recommended a twenty (20) year storm drainage capital program
that relates to the system requirements of each basin This twenty (20)
year program provides for the installation of storm drainage improvements
in existing and developing areas of the City where a positive cost/benefit
ratio exists for each project
A basin fee for capital construction has been included to finance these
improvements Future and existing developments would contribute to the cost
of these facilities based upon the benefits to be derived from the capital
construction
The basin fee for new and existing developments would depend upon the
improvements required in each basin, the intensity of existing and proposed
development, and the size of each basin
A minimum fee will allow critical storm drainage improvements to begin in
undeveloped areas while improvements to existing areas are further reviewed
in terms of risk and consensus
17 ART IN PUBLIC PLACES
The City of Fort Collins is encouraging the development of the arts as a
highly satisfying end in itself, but also to improve the quality of life
via creative surroundings in the community Visually a community is
sterile until the quality of the environment is enhanced by the addition
of visual arts to public buildings, parks, and plazas To this end, City
Council and staff have developed a program to provide art in public places
for the City of Fort Collins
1 Art in Public Buildings
An art acquisition program for the City' s major public buildings
housing employees and for public gathering places will be devel-
oped in 1982 A budget of $5,000 per year has been established
to initiate this program until all buildings reflect this policy
2 Art in the Parks
The budget for each new park will include $1 ,000 to $5,000 for
active sculptures and passive art as a part of the unique park
experience This is to be designed into the new park construction
schedule
3 Jury Policy
A policy for a jury of at least three persons with diversified
professional arts background will be established to determine
commissions and selections of artworks for public places
Jurying will assure that the selections will have a universal
appeal and relieve any single person of the responsibility of
selection for a cross-section of tastes
4 Center for the Study of Contemporary Art
The City staff and community will be encouraged to become involved
with CSU in the development of the Center for Contemporary Art
This should expand the community' s awareness and appreciation of
contemporary art
18 PENSIONS
The City of Fort Collins contributes to five (5) pension plans, including
0 Police
0 Fire
0 General Employee Retirement
0 State Pension - Police
0 State Pension - Fire
The Police, Fire, and General Employee Retirement Plans are administered by
the City of Fort Collins The rate of contribution for the City admini-
stered plans is based upon an annual actuarial analysis for the normal cost
and unfunded liability of the number of employees participating in each
pension plan
In 1981, an actuarial study of the costs and benefits of each plan was
completed which recommended
0 The reduction of the City' s normal contribution rate due to changes
made in the actuarial assumptions
0 The amortization of the unfunded liability over a twenty (20)
year period in order to provide for soundly financed pension
plans
0 An adjustment to the benefits provided by the General Employee
Retirement Plan in order to maintain comparability with benefits
provided by other front range communities
The changes recommended in the actuarial analysis have been incorporated in
the Revised 1981 and Recommended 1982 budgets for a savings of $396,990
Based upon City Council action, the 1982 pension policy is
1 The City will maintain contribution rates at a level sufficient to
meet all current normal costs of each pension plan
2 Any unfunded liability incurred by the individual pension funds
will be amortized over a period not to exceed twenty (20) years
3 A thrift plan will be added to the general employees retire-
ment plan to maintain comparability with benefits provided by
other Front Range communities
The 1983 rate requirements to continue this policy are
GENERAL EMPLOYEE
NORMAL COSTS POLICE FIRE EMPLOYEE THRIFT PLAN
estimated
City Contribution 8% 8% 4 385% 3 0 max
Employee Contribution 8% 8% -- 3 0 max
TOTAL 16% 16% 4 385% 6 0 max
GENERAL
UNFUNDED LIABILITY POLICE FIRE EMPLOYEE TOTAL
City Contribution $125,000 $45,700 $227,000 $397,700
19 MEDICAL INSURANCE
Currently the City of Fort Collins purchases medical insurance coverage for
all permanent City employees through an insurance carrier An analysis of
the existing medical insurance rates and the rates that would be required
with a partially self-funded insurance plan shows that
0 the City could save $125,000 to $240,000 in the transition year
to partially self funded insurance, and
0 monthly contribution rates could be maintained at a lower rate than
that charged by the current carrier
One of the primary reasons that a partially self funded insurance program
has become a viable option to traditional insurance coverage is the crea-
tion of a consortium of cities to collectively bid administrative services,
stop-loss insurance for unexpected emergencies, and life and accidental
death and dismemberment insurance resulting in lower rates
The 1983 Budget continues the partially self-funded medical insurance
program for City employees and incorporates the projected savings The
benefits received by City employees will be the same as those provided
by the private medical insurance carrier
20 LEASE/PURCHASE
The City of Fort Collins has used lease/purchase financing for the provi-
sion of new and replacement equipment In 1981 , this policy was extended to
the purchase of new and replacement vehicles and rolling stock in order
to
0 ensure the timely replacement of vehicles and equipment,
0 ensure that annual vehicle replacement requirements are included in
the annual budget
Other advantages that lease/purchase financing can offer over the tradi-
tional cash method of financing are
1 Decreasing the impact of inflation on the purchase of new and
replacement equipment
2 Reducing the initial impact of the cost to user departments by
enabling acquisition costs to be spread over the useful life of
the equipment
3 Safeguarding the opportunity to use cash assets to earn higher
interest than the interest cost of lease/purchasing
Finally, it should be noted that the City is able to discontinue the
equipment leases at its discretion so that future City Councils will
have the option to continue or discontinue the policy of lease/pur-
chasing City equipment
21 PRIVATE CONTRIBUTIONS
In reviewing the Quality of Life Services, such as Recreation, Lincoln
Center, and the Library, it was determined that the City should make a
greater effort in securing private contributions for these ongoing programs
and services
Quality of life programs represent an "extra" that we have been able
to provide in Fort Collins in the past and may not be able to provide
at the same level without additional support in the future
During 1981 , the Friends of the Library implemented a fund drive to
purchase an electronic sensing device to protect against the loss of
library materials and the Lincoln Center has actively solicited contribu-
tions for the purchase of equipment to increase the utilization of the
facility Contributions such as these reflect the community' s willingness
to support the quality of life services provided by the City without
jeopardizing other basic and maintenance of effort activities
Other opportunities for individual or organizational contributions are
currently being developed for City Council ' s review in an effort to
continue to encourage private contributions for quality of life services
22 REVENUE SHARING
In order to avoid dependency upon federal funds that may not continue for
basic or core service areas, the City currently utilzies Revenue Sharing
monies only for one-time and/or capital costs The exception to this
policy is the use of Revenue Sharing funds for social service programs on
an on-going basis (i e , private, non-profit agency contributions, Property
Tax and Utility Rebate Programs, and the Volunteer Program)
With the possible termination of Revenue Sharing in 1983, the 1982 Budget
reflects the first steps toward the phasing out of these funds with total
elimination in 1984 Alternative funding sources for these programs will
need to be addressed
23 REBATE PROGRAMS
The City recognizes that certain segments of the population, specifically
handicapped and senior citizens on fixed incomes, are unable to keep pace
with increasing taxes and utility costs The City has, therefore, estab-
lished Property Tax and Utility Charge Rebate Programs to provide finan-
cial assistance to those applicants who qualify under established guide-
lines (e g , income, residential , disability certification, etc ) Income
guidelines are adjusted periodically in accordance with State income levels
established for such programs
The 1983 Budget includes a Sales Tax Rebate Program for food using the same
applicant guidelines as the other rebate programs
The City will continue to maintain these programs and will adjust income
guidelines and rebate amounts as necessary
24 CULTURAL SERVICES & FACILITIES FEE POLICY
Background
The Cultural Services and Facilities Fund shall budget to recover a minimum
of 40% of its total cost in revenue generated through fees and charges
This shall be accomplished through implementing the following policy
1 Total revenue from fees and charges shall cover a minimum of 55%
of Lincoln Center Operating and Maintenance and Performing and
Visual Arts Programming budgets This includes revenues generated
at the Lincoln Center from rentals, equipment, concessions and
other miscellaneous sources and all total direct revenues from the
Performing and Visual Arts Programming The difference between 55%
and 100% will be funded by a transfer from the General Fund
2 The Cultural Services and Facilities Administration and the Museum
and Historic Landmarks budgets provide minimal financial support
and will be funded by a transfer from General Fund
3 A rental fee for Avery House shall be reviewed annually and
charged on rooms not used by Poudre Landmarks
4 Major capital improvements and renovations will be financed
through sources other than Cultural Services and Facilities
Fund
5 Solicitation of funds through donations, fund-raising events, and
non-traditional sources shall be encouraged by the City Staff,
Lincoln Center League, the Cultural Resources Board and the City
Council
Funding collected for any special purpose shall be earmarked for
that purpose, and these funds will be processed through the Fort
Collins Foundation
ACTION
The proposed 1983 Cultural Services and Facilities Budget and fees have
been developed utilizing this policy
25 PAY PLAN
Background
The C, ty' s goal as an employer is to attract and keep quality employees
To help accomplish this goal , the City has established the upper third pay
philosophy The upper third pay philosophy says that after a survey is
made of other organizations in the relevant labor market, the pay for Fort
Collins' employees will rank in the upper third of those organizations
surveyed
The upper third philosophy has been maintained for five general reasons
1 To attract quality employees
2 To retain quality employees
3 To operate the City with fewer employees than comparable juris-
dictions
4 To provide an incentive and a reward for productivity
5 To recognize costs savings generated by productive employees
The maintenance of the upper third philosophy can be jeopardized by a slow
economy The City shall implement plans to accomodate the upper third pay
philosophy through sound financing mechanisms
ACTION
Every effort will be made to provide the economic adjustment necessary for
the upper third by January of each year If this is not financially
feasible, as much as can be provided (given the priority demands on avail-
able resources) will be given in January
In April , Council will review the costs of the "upper third" pay plan and
ways to fund it based on savings generated and any increased revenue
growth At that time, Council will implement all or as much of the upper
third as can be soundly financed
Passed and adopted at a regular meeting of the City Council held this
5th day of October, 1982
Mayor
ATTEST
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