HomeMy WebLinkAbout1981-140-10/20/1981-ADOPTING THE FINANCIAL AND MANAGEMENT POLICIES RELATING TO THE 1982 FINAL BUDGET RESOLUTION 81-140
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING THE FINANCIAL AND MANAGEMENT
POLICIES RELATING TO THE 1982 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 1982 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 1982
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 1982
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 per-
formed 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
requiring an expenditure of funds to maintain
Quality of Life - these are activities which are provided for more
specialized 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
These categories were used to determine increases for the 1982
Budget for all service areas Basic or core services were authorized a
10 5% increase and Maintenance of Effort and Quality of Life services
were given a 9% increase
2 SALES TAX DISTRIBUTION
Background
As part of the 1982 budget process, City Council recommended the
addition of 25 of a 14 sales tax to provide increased financing
for the City' s current capital requirements and adjusted the
existing Sales Tax Distribution Policy to increase the funding
for Transfort from 5% to 10/
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t
Action
Based upon City Council direction, the U added in 1980 and the 25
of U added in 1982 will be used accordingly
1982 Policy = 1982 Policy =
1t of Sales Tax 1 25� Sales Tax
Seven Year Capital Program
Operation & Maintenance 30% 24%
General Fund
Basic Services 18% 14%
Maintenance of Effort 7/ 60/
Quality of Life ( less than 1%) ( less than 1%)
TOTAL 25% 20%
Transfort
Operation and Maintenance 10% 8%
Capital Improvements
Streets 25% 20%
Other Capital 6% 25%
TOTAL 31% 45%
Reserves
General Fund 4% 3%
GRAND TOTAL 100/ 100%
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 compre-
hensive set of policies in the past Comprehensive financial policies
should include statements concerning
o Net Income Requirements
o Capital Cost Financing
e Reserve Requirements
o Rate Requirements
Policy statements have been developed for each area listed above
and incorporated into the 1982-86 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
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- Principal reductions of outstanding bonds
- Loan repayments to Federal or State agencies
- Annual operating reserve increases
RESEPVES
The following reserves shall be established and maintained in the
applicable 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 pre-
ferred 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 Expan-
sion)
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
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System expansion shall be funded on a Pay-As-You-Go basis from a
combination 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
IMPACT OF WATEP & SEWER FINANCIAL POLICY
Net Income Requirements
1982 1983 1984 1985 1986
Water Utility $619,875 $795,208 $807,843 $929,073 $929,506
Sewer Utility 190,000 610,437 618,903 575,774 591 ,730
Bond Issue Requirement
1982 1983 1984 1985 1986
Water Utility $3,185,000 $ -- $3,350,000 $ -- $1,045,000
Sewer Utility $6,050,000 -- $ 650,000 -- --
Rate Requirements
1982 1983 1984 1985 1986
Water Utility 11 00/ 7 36% 5 16% 5 68% 1 01%
Sewer Utility 27 00% 26 65% 1 79% 2 61% 1 96%
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
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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
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 (exclud-
ing 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 con-
sidered 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 expenditures 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 improve-
ments can be determined to benefit the overall population in the
future, debt financing may be appropriate This policy will be inte-
grated 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
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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 Dased upon these findings
5 RESERVE POLICY
Formally adopted reserve policies are an important factor in maintain-
ing the City of Fort Collins in good fiscal health Reserve policies
have been formally adopted by Council for the three utilities, how-
ever, 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
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CAPITAL RESERVES
Capital reserves are established in order to provide for normal
replacement of existing capital plant and additional capital improve-
ments 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 contin-
gency, which provides for the conceptual study and preliminary design
of unanticipated 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
defaults 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 policv Necommended 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,
® 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, fi-
nanced 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
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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 appro-
priate 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 utilized
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
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3 Fort Collins maintains good communications with bond rating
agencies about its financial condition
The 1982 Budget includes debt service payments and reserve require-
ments for all debt currently outstanding as shown on Table B-1 and for
all proposed debt issues as shown on Table B-2
TABLE B-1 CURRENT DEBT
PRINCIPAL AMOUNT AMOUNT OF PRINCIPAL
OUT-
FUND DATE TYPE OF DEBT OF IOFUISSUETIME STANDINGANDRatT1/1/82
Equipment 1979-84 Lease Purchase $ 367,000 $ 259,433
Agreement
Water 1974-75 Refunding Bonds 1,935,000 855,150
1977-97 General Obligation
Bonds 5,000,000 7$ 58,520
Sewer 1975-90 Refunding Bonds 3,155,000 2,952,775
Golf 1974-98 Loan from Water Fund 409,824 445,972
1980-85 Lease Purchase
Agreement 59,670 59,555
General
Fund 1980-85 Sales & Use Tax
Revenue Bond 1,035,000 944,000
1980-85 Lease Purchase
Agreement 180,424 132,622
Capital
Projects 1981-01 General Obligation No schedule
Park Bonds 3,000,000 currently
Sales Tax 1981-01 Sales Tax Revenue
Bonds 5,700,000 11,946,663
1982-1986 Parkland 215,000 284,960
Airport 1981-1982 Sales & Use Tax -
Bond Anticipation
Notes 2,000,000 2,225,000
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TABLE B-2 PROPOSED DEBT ISSUES
PROPOSED TYPE TOTAL
FUND DATE OF DEBT AMOUNT
Capital Projects
Community Parks 1982 General Obligation Bonds $2,065,000
Streets 1982 Sales & Use Tax Revenue
Bonds $ 900,000
1983 Sales & Use Tax Revenue
Bonds $4,870,000
Sewer 1982 Revenue Bonds $4,790,000
1984 650,000
Storm Drainage 1982 Revenue Bonds $ 269,500
1983 429,990
1984 498,610
1985 411,620
1986 If212,940
Water 1982 Revenue Bonds $3,185,000
1984 If3,350,000
1986 111,045,000
Airport 1982 Sales & Use Tax Revenue
Bonds $2,000,000
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 oe
obtained
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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 in-
creases 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 Gene-
ral , Cemeteries, Golf, Light and Power, Lincoln Center, Performing
Arts, Parks, and Street Oversizing Funds
9 PAkKS i .1U KEC, [,,TIO", 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
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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 miscel-
laneous 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
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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 1982 Parks and 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
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 infla-
tion, 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 established 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
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Business License - Class I would be used for licenses designed to
ensure the qualifications and liability insurance coverage of the
applicant as dell 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
operation, and recover the increased police, street, or administrative
costs involved with monitoring these operations
Based upon these changes, fee schedules for miscellaneous fees and
taxes are shown on Table B-3
TABLE B-3 MISCELLANEOUS FEES AND TAXES
1981 PROPOSED
REVENUE ITEM FEE FEE
Telephone Franchise Fee $ 50/account/mo $ 65/account/mo
Business License-Class I
Arborist $100 initially/$25 renewal $25
Auctioneer $100 25
Seasonal Vendor __ 25
Street Vendor 25 25
Trash Hauler I* __ 25
Second Hand Dealer 1 25
Business License-Class II
Alarm Business 25 50
Bowling Alley 15 50
Dance Hall 50 75
Motion Picture Theatre 75 100
Drive-In Theatre 50 75
Game Machine (per machine
every 6 mos)
Foosball , Air & Electric 25 35
Pinball 37 50 50
Pool Tables 5 7 50
Pawn Broker 50 50
Carnival $50/day $75/day
*Trash Hauler Class I-under one ton capacity trucks
Class II-one ton and heavier trucks which have a
greater impact on City streets
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The General Fund estimated revenue based upon the proposed fee would
be increased by $34,250
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 Cur-
rently, 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
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
O 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 (Transfort,
Lincoln Center, and Cemeteries)
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13 ENTERPRISE FUNDS
The City currently has nine Enterprise Funds They include Ceme-
teries , 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 expenses Historically, ser-
vices 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 account-
ing will be provided through customized monthly statements to indicate
their income/disbursement position
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 gen-
eration 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
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shoulder some of the risks which innovation and being first in the
field entail
Towards these ends , the City Council will look for implementa-
tion 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 involved
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
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0 A contract with CSU for $64,000
9 User fees (non-CSU) $75,000
9 A General Fund operating subsidy of $397,594
This level of financing operates the present four bus/additional
peak hour bus system The system carries 301 ,000 riders and is
fully-loaded during peak hours Included in this financing is a
Care-A-Van subsidy of $68,864
Additionally, the City has received a federal Urban Mass Transit
Grant of $3,630,960 to construct a maintenance facility and replace
four buses 4ith the City's matching share being $907,740
Looking toward the next five ,rears, inflation and energy will become
increasingly restrictive upon our ability to afford private auto-
mobiles, and other forms of people movers (e g , bus systems and light
rail systems) will become more important in all communities Our
present system cannot handle the degree of change expected during this
period, however, current financing of Transfort does not allow signi-
ficant expansion of the system early in this five-year period
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 coordination efforts with Care-A-Van and the School District,
grant awards, and increased fees through advertising and contracts A
detailed plan for Quality Transfort System development will be com-
pleted in 1982
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
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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 neeas, the City
has developed 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 installa-
tion of storm drainage improvements in existing and developing areas
of the City where a positive cost/benefit ratio exists for each
prof ect
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 1982 storm drainage capital fees
are
Basin Fee on Existing Development
Averaging 640 per month
Basin Fee on Future Developments
Averaging $4,673 per acre
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
This 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
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1 Art in Public Buildings
An art acquisition program for the City' s major public buil-
dings housing employees and for public gathering places will be
developed 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 adminis-
tered by the City of Fort Collins The rate of contribution for the
City administered 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
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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 incorpor-
ated 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 1982 rate requirements to implement this policy are
GENERAL
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
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19 MEDICAL INSURANCE
Currently the City of Fort Collins purchases medical insurance cover-
age 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
A 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 creation of a consortium of cities to collectively bid admini-
strative services, stop-loss insurance for unexpected emergencies, and
life and accidental death and dismemberment insurance resulting in
lower rates
The 1982 Budget includes 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
provision 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
9 ensure the timely replacement of vehicles and equipment,
® ensure that annual vehicle replacement requirements are included in
the annual budget
Other advantages that lease/purchase financing can offer over the
traditional 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
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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
The 1982 budget has incorporated the 1981 lease/purchase payments
totalling $233,056 and additional new and replacement equipment for
1982 totalling $155,976
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
contributions for the purchase of equipment to increase the utiliza-
tion of the facility Contributions such as these reflect the com-
munity' 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 ( 1 e , private, non-profit agency
contributions, Property Tax and Utility Rebate Programs, and the
Volunteer Program)
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tr
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, specif-
ically handicapped and senior citizens on fixed incomes, are unable to
keep pace with increasing taxes and utility costs The City has,
therefore, established a Property Tax and Utility Charge Rebate
Program to provide financial assistance to those applicants who
qualify under established guidelines (e g , income, residential ,
disability certification, etc ) Income guidelines are adjusted
periodically in accordance with State income levels established for
such programs
The City will continue to maintain these programs and will adjust
income guidelines as necessary Additionally, the City will consider
the possible implementation of a sales tax rebate program for food in
1983
Passed and adopted at a regular meeting of the City Council held this
20th day of October, 1981
ATTEST May r
14
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City Clerk QN
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