City taps reserves to balance budget

By Dan MacArthur
Fossil Creek Current

Counting on happier times just around the corner, Fort Collins will dip into its savings to fund additional programs in the 2008-2009 budget set for final adoption Nov. 20.

There will be less to look forward to for residents, however, who will bear hikes in the cost of utilities in the next two years.

Wastewater rates will increase 12 percent next year and 11 percent the following year to pay for the reconstruction of the Mulberry sewage treatment plant. City officials estimate the rate hike on average will cost customers an additional $2.37 a month in 2008 and $2.33 a month in 2009. Revenues will fund the nearly $32 million renovation of the failing 60-year-old facility.

Residents also can expect electric rates to increase 2.3 percent in 2008 and 2.7 percent in 2009, resulting in a monthly increase of about a buck. Wholesale electric rates are set by the Platte River Power Authority with the member municipalities passing them on to customers as part of the total utility bill.

The willingness to tap one-time reserves to maintain or expand preferred programs was largely responsible for avoiding the drama and trauma surrounding the previous biennial budget. That 2006-2007 budget resulted in the loss of 107 positions and $5 million in cuts.

The new budget was constructed from the beginning with $3 million in reserve funds. At the Oct. 16 first reading, however, the city council agreed to include $1.3 million for additional services and programs such as affordable housing, human service grants and neighborhood code enforcement. They were funded principally from additional reserves and new sales tax revenues resulting from a reduction in the fee merchants retain in compensation for collecting the tax.

In a last-minute addition, $65,000 was shifted from affordable housing incentives to maintain nighttime Dial-A-Ride paratransit for people with disabilities. Proponents turned out in force to persuade the council to continue the service through 2009. In the meantime, Dial-A-Ride and the entire bus system will be evaluated in a $100,000 update of the Transfort strategic operating plan - another of the supplemental items added to the budget.

The pending budget is a taking-care-of-business one aimed at maintaining the level of services during what the city characterizes as the next two "rebuilding years." It is not dramatically different than the previous one other than the funding for the Mulberry treatment plant and more than $63 million for the Mason Corridor. That figure, which includes the $13.6 million state and local match, assumes the city receives a Federal Transit Authority grant for the remainder. Despite the uncertainty, that full amount must be budgeted so Fort Collins will have the authority to spend the grant money if received.

With Mason Street budgeted for 2008 and the Mulberry plant for 2009, those two big-ticket items make it difficult to draw meaningful comparisons between the two budgets. The 2008 budget totals $569.6 million with the 2009 budget weighing in at $537.3 million.

The general fund, which reflects the city's core operations, shows a 2.4 percent increase from the nearly $107.8 million in 2008 and $110.3 million in 2009. Sales and use tax revenues--the city's primary source of revenue - are predicted to increase just over 2 percent and 2.6 percent, respectively. Fort Collins' 9.797 property tax mill levy will remain the same.

Further in the future, sales and use taxes are predicted to increase by 4.1 percent in 2010 and $4.5 percent in 2011 with the opening of the new Front Range Village shopping center and redevelopment of the Foothills Mall.

This is the second time the city has employed the budgeting-for-outcomes approach in developing a two-year outlook for revenues and spending. Seven different "desired outcomes" are established at the start - economic and environmental health, safety, neighborhood livability, cultural and recreational opportunities, transportation and high-performing government.

Teams of nearly 100 city employees then develop "purchasing strategies" to meet those goals. Departments then submit "offers" that the teams accept or reject based on which best accomplish the goals with the money available.

The teams this year winnowed through hundreds of offers totaling more than $939 million in one-time and ongoing expenses during the next two years. Among the winning items "purchased" was police staffing associated with the Southwest Annexation at a cost of $847,000 in the first year, a party patrol and riot prevention program at a cost of $16,700, a trash districting study for $135,000 and a graffiti control coordinator for $43,500.

Those that didn't make the cut include $665,000 for establishing a Poudre Fire Authority south battalion, $2.67 million for replacing PFA Station 4, implementation of the city logo and brand at a cost of $237,000, and addition of four officers in the downtown District 1 station at a cost of more than $470,000.