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TBP 2015-11-04
Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Town Board Briefing October 29, 2015 Please note that members of the Town Board will have dinner together starting at 5:30pm. The Board will begin the meeting at 6pm with an executive session regarding litigation that is anticipated to conclude by 7pm. As discussed during the hearing regarding the Rendezvous 4E open space dedication extension, the language in the agreement has been amended to provide that trails will remain open to the public. We will open our first Public Hearing regarding the 2016 Budget, materials from the last meeting and additional materials are included in the packet. Wendy Sullivan will be attending the meeting to facilitate discussion regarding attainable housing, the Winter Park Housing Needs Assessment is included in the packer for your reference. We will be recommending appropriation of resources to further this work in Fraser. I will be seeking authorization to enter into contract with Ehlers for consulting services regarding economic development, as suggested during the Board’s consideration of Resolution 2015-10-02 regarding Economic Development. Ehlers brings experience and resources to the matter that will assist us in moving this discussion forward. Touch the Sun and Divide Music Festivals are proposed for the summer of 2016 on Byers Peak Ranch. This property is not within the Town of Fraser and would require Temporary Use Permits from Grand County. The County will be conducting hearings on these proposals, the matter before the Town Board is whether or not the Board would like to submit comment. Staff will be submitting suggested conditions for consideration to the County. As always, feel free to contact me if you have any questions or need any additional information. Jeff Durbin Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Town Manager Newsletter October 29, 2015 Community Matters As we near the end of October, I’d like to wish everyone a Happy and safe Halloween! Halloween is on a Saturday this year and we expect this will result in greater number of trick or treaters, along with extended hours! Our Police Department is excited to host the 5th annual Trick or Treat with a Cop. Local children have enjoyed this event all much as much as our officers. Last year approximately 300 kids participated. The event is based at the Fraser Historic Church and Community Center from 5pm til 7pm. We’re gearing up for a sustainability presentation at the November 18, 2015 Town Board meeting. Our preliminary analysis showed that commercial accounts make up for 43% of our community’s overall energy consumption. On October 27th staff met with some of bigger commercial accounts to discuss sustainability initiatives and their aspirations for the future. We are currently reviewing energy provider programs that we may promote to our commercial (as well as residential) accounts. On November 18th we’ll summarize all of this information. Recall that this energy work is one of the three sustainability initiatives all aimed at increasing the Town’s overall sustainability. The other two components are the Technical Energy Audit and initiatives targeted at Municipal Solid Waste (MSW) diversion. Administration We had our first Mary’s Pond Operating Committee on October 22nd and am pleased to note that we had a good discussion and look forward to a productive relationship. 2 Building Building plans continue to be submitted and building permits issued as there seems to be no slow down yet despite the onset of winter. The amount of current construction activity will keep the building department busy throughout the winter performing inspections. A new two-family dwelling has been issued in the Willows subdivision of Grand Park and another two-family dwelling has been issued in East Mountain Filing 9 of Rendezvous. A single-family dwelling has been issued in Rendezvous as well. Murdoch’s retail store is currently stocking the shelves and should be opening in the near future. A project of interest that has been submitted for building permit is a new veterinary clinic located next to Murdoch’s. Alteration and repair work continues as always. Total Number of Building Permits Total for 2011 45 Total for 2012 49 Total for 2013 64 Total for 2014 41 2013 through October 58 2014 through October 37 2015 through October 71 Difference 2015 /2014 34 Difference 2015 /2013 13 Dollar Valuation (no hourly fee has valuation $ in 2011 - 14) Total for 2011 $3,743,778 Total for 2012 $2,190,195 Total for 2013 $5,508,091 Total for 2014 $7,529,211 2013 through October $5,503,207 2014 through October $7,506,013 2015 through October $13,811,743 Difference 2015 /2014 $6,305,730 Difference 2015 /2013 $8,308,536 Building Fees Total for 2011 $40,277 Total for 2012 $27,412 Total for 2013 $66,458 Total for 2014 $73,266 2013 through October $65,785 2014 through October $72,439 2015 through October $137,259 Difference 2015 /2014 $64,820 Difference 2015 /2013 $71,473 New Residential Area 2015 through October 98,359 sq. ft. New Commercial Area 2015 through October 5,000 sq. ft. New Garage Area 2015 through October 18,954 sq. ft. New Deck/Patio Area 2015 through October 9,644 sq. ft. 3 Planning Commission The Planning Commission reviewed a subdivision exemption plat at a public hearing on October 28, 2015 and recommended approval with conditions. The applicant, Cornerstone Winter Park Holdings, LLC and Grand Park Development LLC, requested approval of an exemption plat in order to convey two parcels to the West Mountain Metropolitan District. The two parcels identified as parcel 1 and parcel 2 represent the road right-of-way corridor and construction area associated with the Union Pacific Railroad Underpass (UPRR) project. The Commission also recommended approval of Fraser’s Three Mile Plan. The Three Mile Plan is a component of the Comprehensive Plan and is a long-range planning opportunity for municipalities to consider where they want to annex, how to provide services in the newly annexed areas and how they will sustain adequate levels of service throughout the rest of the municipality. The Commission also discussed a work plan for 2016. Among other ideas discussed, they would like to update the Comprehensive Plan in 2016 and strongly encourage the Town Board to budget funds accordingly. Public Works WATER: A new fire hydrant was installed in Clayton Court on Monday (10/26) replacing a damaged hydrant. The Clayton’s awarded Nick’s Dirt Works the contract for the replacement of the private water service line project. Public Works staff will coordinate with the contractor on an as- needed basis related to the Town’s infrastructure for closing valves and inspections of work on or around our infrastructure. Staff continues with water and sewer service line installation inspections in both Grand Park and Rendezvous. These activities are anticipated to continue throughout the fall and into the early winter. SANITARY SEWER: The North Sewer System Rehabilitation and Replacement project is progressing, slowly. Conroy is currently working on the main sewer line between Carriage and Norgren. The work is slow and tedious due to the tight constraints of the water line and overhead power lines and poles. PW staff continues to provide updated public information communications to property owners affected by our construction activities. STREETS: CR 804 Phase 3 – Update (10-29-2015): The BOCC approved an extension of the contract with Everest until November 7th. The new storm sewer crossing in the lower section of the roadway was installed week of 10/19. The concrete pan construction will be completed early this week. The lower roadway sub-base preparation is continuing 4 with paving of the bottom asphalt lift scheduled for Thursday and Friday (10/29-30). Paving operations will be dependent on temperatures and weather. Lane channelization striping from SH40 to Safeway is currently scheduled for Friday (10/30). GARDENS: Closed for the season… GENERAL: Pedestrian Bridge over the Fraser River Project update: The decking was completed last week including the installation of the hand rails, wheel stops and earth approaches for the raised section of the boardwalk. Final grading and seeding will take place in the next week or two, weather dependent. At-grade final trail construction will be completed by 11/6 with the help of volunteers from HTA and PW staff. For Further Information Please feel free to contact me Jeff Durbin 970-726-5491x202 jdurbin@town.fraser.co.us FRASER BOARD OF TRUSTEES MINUTES DATE: Wednesday, October 21, 2015 MEETING: Board of Trustees Regular Meeting PLACE: Fraser Town Hall Board Room PRESENT Board: Mayor Peggy Smith; Mayor Pro-Tem Philip Vandernail; Trustees; Eileen Waldow, Katie Soles, Cody Clayton Taylor, Andy Miller and Jane Mather Staff: Town Manager Jeff Durbin; Town Clerk, Lu Berger; Finance Manager Nat Havens; Public Works Director Allen Nordin; Town Planner, Catherine Trotter Others: See attached list 1. Regular Meeting: Roll Call Mayor Smith called the meeting to order at 6:03 p.m. 2. Executive Session: For a conference with the Town’s Attorney for the purpose of receiving legal advice on specific legal questions under C.R.S. Section 24-6-402(4) (b) and for the purpose of determining positions relative to matters that may be subject to negotiations, developing strategy for negotiations, and/or instructing negotiators, under C.R.S. Section 24-6-402(4)(e) regarding litigation and to include TA McGowan and TM Durbin. Trustee Soles moved, and Trustee Vandernail seconded the motion to enter executive session. Motion carried: 7-0. Enter: 6:05 p.m. Exit: 6:32 p.m. Attorney’s Opinion Required by C.R.S. 24-6-402(2)(d.5)(II)(B). As the attorney representing the Town of Fraser, I am of the opinion that the entire Executive Session, which was not recorded, constituted a privileged attorney-client communication. Rod McGowan, Town Attorney Trustee Vandernail moved, and Trustee Taylor seconded the motion to exit executive session. Motion carried: 7-0. 3. Approval of Agenda: Page 2 of 4 Minutes moved to discussion item 7e. Trustee Vandernail moved, and Trustee Mather seconded the motion to approve the Agenda. Motion carried: 7-0. 4. Consent Agenda: a) Minutes – October 7, 2015 moved to discussion item 7e. 5. Open Forum: Jay Clough addressed the Board regarding safety and a secondary access (Fraser Valley Parkway) road for Fraser. Suggested a building moratorium. Patrick Brower gave an update on the Grand Enterprise Initiative. Andy Miller - New trail being built off Meadow Ridge Hill. 6. Public Hearings: a) Growhouse Fraser License Modification of Hours of Operation Trustee Soles moved, and Trustee Waldow seconded the motion to open the public hearing on Growhouse Fraser License Modification of Hours of Operation. Motion carried: 7-0. TA McGowan outlined the hearing procedures and entered the following items into the record as exhibits: • Proof of publication. • Applicant’s request and petitions. Trustee Vandernail moved and Trustee Soles seconded the motion to accept the exhibits into the record. Motion carried: 7-0. Public comment was taken from: Mike Swisher - COO of Growhouse Fraser LLC. Dan Volpe Jay Clough Trustee Soles moved, and Trustee Taylor seconded the motion to close the public hearing on Growhouse Fraser License Modification of Hours of Operation. Motion carried: 7-0. a) Resolution 2015-10-03 A Resolution of the Fraser Board of Trustees, Acting as the Local Marijuana Licensing Authority for the Town of Fraser, Approving the Request of Growhouse for a Modification of Hours for the Premises at 535 Zerex Street, Suite B-203, Fraser, Colorado. Trustee Vandernail moved, and Trustee Taylor seconded the motion to approve Resolution 2015-10-03 A Resolution of the Fraser Board of Trustees, Acting as the Local Page 3 of 4 Marijuana Licensing Authority for the Town of Fraser, Approving the Request of Growhouse for a Modification of Hours for the Premises at 535 Zerex Street, Suite B- 203, Fraser, Colorado. Motion carried: 7-0. b) Rendezvous Annexation Agreement Amendment Regarding Extension of the Deadline for Open Space Dedication Trustee Taylor moved, and Trustee Vandernail seconded the motion to open the public hearing on Rendezvous Annexation Agreement Amendment Regarding Extension of the Deadline for Open Space Dedication. Motion carried: 7-0. TA McGowan outlined the hearing procedures. Public comment was taken from: Terry Stanford The agreement will have added language addressing the trails will remain open to the public prior to dedication to the Town. Trustee Vandernail moved, and Trustee Taylor seconded the motion to close the public hearing on Rendezvous Annexation Agreement Amendment Regarding Extension of the Deadline for Open Space Dedication. Motion carried: 7-0. 7. Discussion and Possible Action Regarding: a) Resolution 2015-10-04 Approving a Minor Amendment to the Rendezvous Annexation Agreement Amendment Regarding the Deadline for Dedication of 4E Open Space and Authorizing Execution of the Agreement Continued until November 4, 2015 pending revised language re: trail access. b) Resolution 2015-10-02 Economic Development Additional language was added to 1b, 2 and 2c, 1b: and location neutral workers 2: resources subject to standard spending approval process’ including Board approval of expenditures of $10,000.00 or more. 2c fair and cost effective Trustee Mather moved, and Trustee Miller seconded the motion to approve Resolution 2015-10-02 Economic Development. Motion carried: 7-0. TA McGowan was excused from the meeting. c) Financial Policies & 2016 Budget FM Havens briefed the Board on the Financial Policies. Public Comment was taken from: Steve Sumrall d) Minutes – October 7, 2015 Page 4 of 4 Minutes amended to add two people to the public comment section. Motion regarding attainable housing amended. Request to make all non-unanimous votes a roll call vote, Board concurred. Trustee Mather moved, and Trustee Miller seconded the motion modify the minutes. Motion carried: 7-0. 8. Other Business: Trustee Vandernail moved, and Trustee Taylor seconded the motion to adjourn. Motion carried: 7-0. Meeting adjourned at 9:40 p.m. Lu Berger, Town Clerk TOWN OF FRASER RESOLUTION NO. 2015-10-04 A RESOLUTION APPROVING A MINOR AMENDMENT TO THE RENDEZVOUS ANNEXATION AGREEMENT AMENDMENT REGARDING THE DEADLINE FOR DEDICATION OF 4E OPEN SPACE AND AUTHORIZING EXECUTION OF THE AGREEMENT BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FRASER, COLORADO THAT: 1. The Town Board of Fraser, Colorado hereby approves the Minor Amendment to the attached Annexation Agreement Amendment for Rendezvous and authorizes the Mayor to execute the agreement. 2. All documents must be executed within ninety (90) days of the date of this Resolution or this approval shall no longer be effective. DULY MOVED, SECONDED AND ADOPTED THIS 4th DAY OF NOVEMBER, 2015. Votes in favor: ___ BOARD TRUSTEES OF THE Votes opposed: ___ TOWN OF FRASER, COLORADO Absent: ___ Abstained: ___ BY: Mayor ATTEST: (S E A L) Town Clerk THIRD AMENDMENT TO ANNEXATION AGREEMENT FOR RENDEZVOUS EAST MOUNTAIN THIS THIRD AMENDMENT TO ANNEXATION AGREEMENT FOR RENDEZVOUS EAST MOUNTAIN (this "Amendment") is made as of October , 2015, by and between RENDEZVOUS COLORADO, LLC, a Colorado limited liability company ("Rendezvous") and the TOWN OF FRASER, a municipal corporation of the State of Colorado ("Fraser"). RECITALS: This Amendment is made with reference to the following facts: A. Rendezvous and Fraser are parties to that certain Amended and Restated Annexation Agreement dated as of June 4, 2003, and recorded in the Grand County, Colorado, real property records on December 30, 2003, at Reception No. 2003 016733; as amended by the First Amendment to Annexation Agreement dated as of November 2, 2005, and recorded November 8, 2005, at Reception No. 2005- 012708; as further amended by Amendment to Annexation Agreement for Rendezvous East Mountain (Amendment 2006-RZ1) dated as of January 1, 2006, and recorded November 1, 2006, at Reception No. 2006 011630, and as further amended by Second Amendment to Annexation Agreement for Rendezvous East Mountain dated as of October 6, 2010, and recorded , 2010 at Reception No. (collectively, the "Annexation Agreement"). Capitalized terms used in this Amendment have the meanings ascribed to them in the Annexation Agreement. B. Rendezvous is the Developer of the real property referred to as Rendezvous East Mountain, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference. C. Section 17.9 of the Annexation Agreement, as amended, provides that modifications to the Annexation Agreement that directly and specifically affect only Rendezvous East Mountain may be agreed to in writing and signed by Fraser and Rendezvous or its designated successor Developer. D. Pursuant to Section 10.10 of the Annexation Agreement, the Developer agreed to dedicate or convey to Fraser the open space parcel designated as Planning Area 4E on the. 2003 PDD, which is located within Rendezvous East Mountain, with such dedication or conveyance to be completed upon the occurrence of certain events and in any case by October 31, 2010. A portion of said Planning Area 4E, described as Tracts 4E -1, 4E -2, 4E -3, 4E -4, 4E -5, 4E -6, 4E -7, 4E-8, 4E -9, 4E -10 and 4E -11, East Mountain Filing 1 (the "4E -Conveyed Property") has been previously conveyed to Fraser, but the remainder of said Planning Area 4E (the "4E -Remainder Property') has not yet been dedicated or conveyed. E. Rendezvous, as the owner of the property encompassed by said 4E -Remainder Property, has requested an extension of the timeline for dedicating or conveying said property to Fraser, and Fraser is willing to agree to such an extension upon the terms and conditions provided in this Amendment. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements of Fraser and Rendezvous, as more particularly set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Fraser and Rendezvous covenant and agree as follows: 1. Dedication Extension. With respect to Rendezvous East Mountain only, Section 10.10 of the Annexation Agreement is modified by extending the ultimate deadline for the dedication or conveyance of the 4E -Remainder Property to Fraser, from October 31, 2015 to October 31, 2020 (the "Extension Period"), subject to all of the conditions to the previous extension of the ultimate deadline for the dedication or conveyance of the same set forth in the Second Amendment to Rendezvous East Mountain (the "Second Amendment'), except that the Extension Fee described in Paragraph 2 of the Second Amendment payable on or before July 15 of each year shall continue through and including 2020. All other provisions of said Section 10.10 shall remain unchanged. During the Extension Period, Rendezvous shall continue to maintain the 4E -Remainder Property open space including trails upkeep. The trails will remain open for the public's use during the Extension Period. 2. Effect of Amendment. Except as expressly modified by this Amendment, the Annexation Agreement is unmodified, and is hereby ratified and affirmed, and will remain in full force and effect in accordance with its terms. 3. Governing Law. This Amendment will be governed by and construed in accordance with the laws of the State of Colorado. 4. Counterparts. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original, and all such counterparts taken together will constitute one and the same instrument. [Signatures appear on following pages] IN WITNESS WHEREOF, Fraser and Rendezvous have executed this Amendment as of the day and year first set forth above. DEVELOPER: RENDEZVOUS COLORADO, LLC, a Colorado limited liability company (as to Rendezvous East Mountain) By: KOELBEL AND COMPANY, a Colorado Corporation, Manager By Walter A. Koelbel, Jr., President STATE OF COLORADO ) ) ss: COUNTY OF ) The foregoing instrument was acknowledged before me this day of 2015, by Walter A. Koelbel, Jr. as President of Koelbel and Company, a Colorado corporation, Manager of Rendezvous Colorado LLC, a Colorado limited liability company. Witness my hand and official seal. My Commission expires: Notary Public FRASER: TOWN OF FRASER, a municipal corporation of the State of Colorado By Name Title STATE OF COLORADO ) ) ss: COUNTY OF ) The foregoing instrument was acknowledged before me this of 2015, by as of the Town of Fraser, a municipal corporation of the State of Colorado. Witness my hand and official seal. My Commission expires: Notary Public Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com MEMO TO: Mayor Smith and the Board of Trustees FROM: Nathaniel Q. Havens, Finance Manager DATE: October 15, 2015 SUBJECT: Town of Fraser Finance Policies and 2016 Budget MATTER BEFORE THE BOARD: Town of Fraser Finance Policies and 2016 Budget. ACTION REQUESTED: Approval of the new Finance Policies is suggested by staff. Budget hearings and discussions are recommended with the utmost diligence and understanding required by the Board. Budget Hearings will be held on November 4th and 18th along with a hearing and concurrent adoption on December 2nd, 2015. EXECUTIVE SUMMARY: Every five years the Finance Manager provides additions and improvements to the Town’s Financial Policies. This term’s policy enhancements include a re-vamp of the initial policies developed and previously adopted in 2010. Concurrently the Board has been presented with an initial 2016 budget spreadsheet – in our typical 10 year planning tool model. Currently there are many financial challenges facing the Town of Fraser, eerily similar to the past week’s newspaper articles in regards to Grand County. BACKGROUND: The fiscal year budget is the most important document considered by the Board each year. The Budget is the means by which the Town Board establishes its vision for the community in terms of an annual work plan, capital projects, and overall service delivery. The budget appropriates resources that allow the organization to achieve the goals and visions as promulgated by the Board. In contrast, the budget document in the private sector is utilized as a guidance vehicle while in the public sector the budget document is the law. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com As alluded to above, the Town is facing significant financial challenges. The past nine years the Town has adopted budgets with expenditures exceeding revenue projections. Seven of these years we did use unassigned fund balance to gap the difference between revenues and expenses. Fortunately, previous to 2009 the Town had been allocating revenues in excess of expenditures and one time revenues to the General Fund’s (GF) committed reserve and also to increasing the unassigned fund balance. In 2009, as we identified the anticipated effects of the coming financial calamity gripping our country the Board, Town Manager and Finance Manager set a path for the upcoming nine yearly budgets to follow. This course of action included a philosophy of not reducing services provided by the town to its constituents (we have actually increased services over this time period). The plan allowed for the town to budget the use of $250,000 per year of unreserved fund balance over revenue projections – which would allow the town to reach the fiscal year 2017 with enough resources to pay off its bonded indebtedness and not experience any reduction in services. With the initial projections for fiscal year-end 2015 and a budget for 2016 including only base line services (the initial 2016 budget document provided to the Board on July 29th) you can see that in fiscal year (FY) 2018 we will need to spend nearly $1.2m dollars of General Fund reserves (of which the Town has $1.m currently). Hopefully by year end 2015 and 2016 this picture will improve – the economic future for Fraser is improving with the likes of the Holiday Inn Express and Murdock’s opening. If demand for new homes and new vacation homes continues to improve, increases in one-time revenues will improve over budgeted projections – so maybe our use of GF reserves can be moved out to 2019 or 2020. It is my hope that the Board concurs with my concerns regarding the seriousness of our financial situation. This spring I was in attendance at the inaugural Budget 201 seminar presented by The State of Colorado and specifically the Department of Local Affairs (DOLA). DOLA has adopted the budgetary focus as suggested by the Government Finance Officers Association (GFOA), the Governmental Accounting Standards Board (GASB) and based upon Generally Accepted Accounting Principles (GAAP) of the United States. In a nutshell the State is encouraging its Cities and Towns to follow the following model of budgeting by adopting and encouraging communities to do the following as presented in the following discussion from the GFOA: Of all of the functional areas of finance, the one most in need of guidance is government budgeting. The release by the National Advisory Council on State and Local Budgeting of this set of recommended practices represents a milestone in budgeting----in one document governments now have a comprehensive set of processes and procedures that define an accepted budget process. The practices advocate a goal-driven approach to budgeting that spans the planning, development, adoption, and execution phases of the budget. The practices put forward by the Council take a major step forward in promoting the linkage of the budget process with other activities of the government. Their scope is intentionally broad, recognizing that budgeting has many dimensions----political, managerial, planning, and communications, as well as financial. Practices encourage the development of organizational goals, establishment of policies and plans to achieve these goals, and allocation of resources through the budget process that are consistent with goals, policies, and plans. There is also a focus on measuring performance to determine what has been accomplished with scarce government resources. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com The Council’s work is important in emphasizing that budgeting should have a long- range perspective, and not be simply an exercise in balancing revenues and expenditures one year at a time. This focus on long-term financial planning comes at a critical time. Recommended budget practices encourage governments to consider the longer-term consequences of such actions to ensure that the impacts of budget decisions are understood over a multi-year planning horizon and to assess whether program and service levels can be sustained. What is significant about the practices is that they represent an unprecedented cooperative effort by several organizations with diverse interests to examine and agree on key aspects of good budgeting. The Council was founded by eight organizations representing elected officials, government administrators, and finance professionals at both the state and local government level. Council membership also includes representatives of the public finance industry, public employees’ unions, and academia. The consensus achieved by this widely representative body will facilitate implementation of the practices in state and local governments, since there will be a common understanding among all participants in the budget process of what is to be achieved. The release of the Councils guidelines will not solve all of the problems encountered in budgeting----a complex process that involves politics, compromise, and competing visions of the role of government in serving the citizenry. What the practices can do is enhance the quality of decision making by encouraging practices that illuminate the key issues and choices facing a community. The recommended practices have set a new standard of excellence in state and local government budgeting. As with any reform effort, widespread acceptance of changes in budgetary practice will take time, but the benefits promise to be profound and far- reaching. The proposed revised Finance Policies reflect the State and Federal guidance regarding budgeting and reflect Town Board discussion during the 2015 Budget Hearings. The State is very clear on its desires for municipal governments finance policies in regards to budgeting; balanced budgets, pay-as-you-go behavior, adequate reserves along with the increasing of an entities unassigned fund balance, a practice of underestimating revenues and overestimating expenses, a long range budgeting tool of five to ten years and program based budgeting. The State understands that the costs associated with program based budgeting is outside the realm of most smaller communities, and is working hard to be able to pass along solutions derived from our larger sister communities. There is no single line item on any local government’s financials or budget that attracts more attention and discussion (especially from rating agencies, investors, lenders, and all other outside observers) than reserves and unassigned fund balance. The accounting term “unassigned fund balance” reports the difference between a governments assets and its liabilities, and serves as a key measure of financial strength of an organization. Positive fund balance suggests that an agency has resources to apply to the various contingencies that challenge every local government. A growing unassigned fund balance means that a local government is earning more than it spends, and as such is better preparing itself for the next rainy day. While unassigned fund balance amounts found in the annual audit is the measure most heavily relied upon by third-party readers of one’s financial statements such as rating agencies and lenders, most public entities manage their resources – accumulated and Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com projected revenues – through the budget process not the annual financial report. Local governments often maintain several different reserve accounts within their budget, both within and outside of the General Fund. Understanding and reconciling both the audit and the budget reserves are important elements in evaluating an entity’s reserves and reserve policies. Maintaining an adequate fund balance is more important than having a well-articulated policy, but a formal policy serves as the first step in establishing financial discipline – establishing the practice as part of the Town’s financial culture, surviving the generations of management and elected officials. Reserve policies generally measure reserves as a percentage, although there are many approaches, variances exist between entities as to whether this is a percentage of revenues or expenditures, or some other metric. As an example Moody’s analyzes reserves as a percentage of revenues while Standard & Poor’s and Fitch analyze utilizing the expenditure model. What is the right level of reserves? Given the differences between communities and their challenges, there is no one answer as to the appropriate amount of reserves that should be held. There is guidance from the GFOA on the subject, but more importantly since the “one-size” doctrine does not work for all governments, an emphasis on examining one’s own circumstances generally lead to better reserve targets. Identifying individual risks and potential future needs and the amounts that should be reserved to manage those risks and needs. Specific to Fraser, concerns would include the flexibility and volatility in revenues and expenditures, potential capital access in an emergency and long term capital and infrastructure requirements. While there is arguably a minimum level of reserves any entity should maintain, the “optimal” will reflect a collective evaluation of the entity’s specific risk profile, and assessment of available resources and the weighing of trade-offs between long-term stability/resiliency and short- term needs. Reserve funds are generally looked upon as resources to ward off the unexpected financial challenges faced by a government. However I take a stand that reserves are also available for a communities opportunities as well - as long as the reserve policies outline approved uses and re-payment procedures. Reserve funds, in addition to providing financial stability by reducing reliance on indebtedness to finance capital projects and unanticipated emergencies, should also be viewed as a practice for saving for future projects, acquisitions, future infrastructure, equipment and other governmental needs. In uncertain economic times, reserves can also provide officials the budgetary option that can help mitigate the need to cut services or to raise taxes. This practice exemplifies Fraser’s long history of building reserves and increasing the amount of our unassigned fund balance within the General Fund – this alone has allowed the Town to weather the reduction of revenues over the past nine years while increasing service levels to the community. However, I believe Fraser must get back to this practice promptly in the General Fund and to also carry this directive to its operation of its Water and Wastewater funds. ALTERNATIVES: The Town of Fraser is not required to adopt Finance Policies. However, it is my recommendation that the policies as adopted in 2010 be updated. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com RECOMMENDATION: I understand that people have varying levels of expertise and/or interest in financial policies and the above discussion and proposed policies may seem intimidating. Likewise, while I believe the annual budget adoption to be one of the most important actions of the Town Board, public interest in this process is typically low. During the course of drafting the proposed policies and preliminary 2016 Budget, it occurs to me that rather than debating line items and reserve amounts it may be more practical to begin with a discussion of threats and opportunities within each fund. Accordingly, I would suggest the following discussion outline as a starting point that may be more understandable to our community. Of course, this is only a starting point and I hope that you will have additional suggestions. What are we concerned about and what opportunities to we hope to capitalize on in each of our funds? (Threats are listed with the dark dot and Opportunities with the open dots below) General Fund Recession and resulting revenue downturn Natural disaster (flood/fire) Train Derailment Small retail sales tax base/diversification/competition Litigation Tourism based economy o Economic development o Community planning and quality of life enhancement o Increase delivery and levels of service o Property acquisition o Water Fund Groundwater under the influence of surface water and resulting required upgrades to our treatment facilities Ongoing increases in requirement treatment standards Well or Well Field failure System failures (aging system) o Reduce service fees o Wastewater Fund System failures (aging system) Inflow and Infiltration Increases in Joint Facility costs o Reduce service fees o Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Joint Facilities Fund Copper compliance Nutrient removal/2017 permit conditions Ongoing increases in requirement treatment standards Inflow and Infiltration o 1 | Page Town of Fraser, Colorado Financial Policies The Town of Fraser, a statutory Colorado community operating under a Mayor-Manager form of government, has adopted the following financial policies that allow the governing body to view its present approach to financial management from an overall, long-range vantage point. Under the Mayor-Manager form of government the elected governing body is responsible for the legislative function of the municipality; such as establishing policy, passing local ordinances and resolutions, approving appropriations, and developing an overall community vision. These financial policies help to frame resource allocation decisions and establish objectives, standards, and internal controls for the Funds of the Town. Financial policies help; provide for the continuity of service delivery, help to improve the Town’s fiscal stability, and prepare the Town for any potential financial emergencies. Many authorities provide direction in regards to the Town’s financial policies including, the Federal Government, the State of Colorado and it’s Constitution and the Fraser Town’s Code. All these authorities provide for the basic legal requirements and timelines for these policies. Section 1 - Financial Management Overview The following financial policies adopted by the Fraser Town Board on ________________, 2015 establish the framework for the Town’s overall fiscal planning and management. It is the intent of the Town that these policies demonstrate to residents, the credit rating industry, municipal bond investors, auditors, and the State that the Town is committed to sound financial management and fiscal integrity. The goals of the Town’s financial policies are: To support sustainable municipal services. To have a capital improvement program that adequately maintains and enhances the public’s assets over their useful life. To provide cost effective services to citizens and visitors. To provide financial and other service information to enable citizens to assess the costs and efficiency of Town services. To follow prudent and professional financial management practices to assure residents of the Town of Fraser and the financial community that our Town government is well managed and in sound fiscal condition. Section 2 - General Financial Policy I. Fund Accounting The Town uses Fund accounting protocols and procedures as outlined by the Generally Accepted Accounting Principles (GAAP) and following the pronouncements of the Governmental Accounting Standards Board (GASB). A fund is a separate, self-balancing set of accounts used to account for resources that are segregated for specific purposes in accordance with special regulations, restrictions or limitations. The separation of the Town’s activities into funds allows the Town to maintain the 2 | Page appropriate (required) controls over expenditures for each activity and to report on specific activities to interested citizens. Fund Types: All funds are classified into six (6) fund types. These fund types, and the purpose of each are: a. General Fund - To account for the required administrative functions of municipal governance, police protection, public works, parks-open space and trails, community development, street infrastructure, other capital asset operations and preservation, and snow management functions of the Town. Principal sources of revenue for the Town’s General Fund (GF) consists of: property taxes, sales, use and excise taxes. Secondary revenues are derived from franchise fees, licenses and permits, grants, charges for services, intergovernmental revenue, interest earnings, and operating transfers from other funds. Major expenditures within the Town’s General Fund are for personnel costs, materials and supplies, purchased services, capital outlay and transfers to other funds. b. Special Revenue Funds - To account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The Town at this time operates four Special Revenue Funds: The Conservation Trust Fund (CTF) is funded by the State’s net lottery proceeds and interest earnings. Fund balance within the CTF is generally leveraged with grant dollars and donations for new park, open space and trail investments. CTF funds are highly regulated and no expenditures are allowed for ongoing maintenance costs related to any project. The Capital Equipment Replacement Fund (CERF) is funded by State Highway User Trust Fund proceeds along with interest earnings and GF transfers. The CERF is utilized to track expenditures for our public safety fleet, and our public work’s heavy equipment, regular equipment and fleet purchases. The Fraser River Enhancement Fund (FREP) has been used in the past to track inter- governmental projects along the Fraser River corridor from the base of Berthoud Pass to the Joint Facility. The Joint Facilities Fund (JFF) is utilized to operate the Upper Fraser Valley Wastewater Treatment Plant and the facilities capital projects. Operation and maintenance expenditures are refunded to the Fund based upon the current member utilization of treatment capacity. Capital projects at the facility are funded at the member plant ownership percentages. c. Capital Project Funds - To account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction and preservation of capital facilities and other capital assets. The Capital Asset Fund (CAF) is used to provide resources for current and future General Fund capital assets, i.e. streets, bridges, buildings, trails, parks and open space. Currently the CAF is funded by inter-fund transfers, grants and partnerships on a project specific basis. On-going 3 | Page operating revenues need to be identified and dedicated along with reserve accumulations for current and future assets. d. Debt Service Fund (DSF) - To account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest on any bonded indebtedness. The Town’s DSF tracks and allocates resources for the payments of its long term bonded indebtedness. The Fund has both Restricted Reserves and Committed Reserves. e. Enterprise Funds (also called Business or Proprietary Funds) - To account for operations that are financed and operated in a manner similar to private business enterprises. The intent of the governing body is that the costs (expenses including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user fees covering all expenses incurred, and/or net income as appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The Town’s Water Fund (WF) accounts for the water production and distribution systems and its Wastewater Fund (WWF) accounts for the wastewater collections system. Capital projects are budgeted for both enterprises within each fund. f. Fiduciary Funds - To account for resources received and held by the Town in a fiduciary capacity (Trust). Disbursements from these funds are made in accordance with the Trust or other agreements or conditions of the Trust for the particular source of funds. The Town currently has no fiduciary funds in operation. II. Accounting and Auditing Policies The Town maintains a system for financial monitoring, control and reporting for all operations, funds and agencies in order to provide effective means to ensure that overall Town goals and objectives are met and to instill confidence in the Town’s partners and investors that the Town is well-managed and fiscally sound. The Town maintains its accounting records and reports on its financial condition and results of operations in accordance with Federal and State laws, regulations and Generally Accepted Accounting Principles (GAAP), which are set by the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). Annually, an independent firm of certified public accountants performs a financial and compliance audit of the Town’s financial statements. III. Basis of Accounting and Reporting Focus The term “basis of accounting” refers to when revenues, expenditures - and the related assets and liabilities – are recognized in the accounts and reported in the financial statements. Specifically, it relates to the timing of the measurements made. The following are the basis of accounting available for use by the Town: a. Cash Basis – Transactions are recognized only when cash is received or disbursed. 4 | Page b. Accrual Basis – Transactions are recognized when the economic event occurs, regardless of whether or not cash is received or paid. Proprietary funds (Water and Wastewater Funds), use the accrual basis of accounting. These funds have an income measurement/capital maintenance focus. The accrual basis of accounting is used by private enterprises as well. c. Modified Accrual Basis – Expenditure transactions are recognized when incurred. Revenues are recognized when they are both measurable and available to finance the expenditures of the current period. Governmental funds, including general, special revenue, debt service, and capital projects, use the modified accrual basis of accounting. For a revenue to be recognized in a governmental fund, it must be “measurable” (the amount must be known or be reasonably estimated), and it must be “available” to finance the expenditures of the same fiscal period for which the revenue is recorded. “Available,” in this case, means collectible in the current period or soon enough thereafter to be used to pay liabilities of the current period. For purposes of consistency, that time-frame shall be sixty (60) days which was set for purposes of Property Tax revenues. Reporting Focus (Budget vs. GAAP) - This concept is used to refer to the way transactions are recorded and reported for compliance with Colorado Budget Law as opposed to financial statement presentation in conformance with GAAP. 1. Budget Basis - The Town’s monthly statement of revenues and expenditures are reported during the fiscal year on what is informally called a “budget basis.” The Town’s transactions are recorded throughout the year in accordance with the financial statement requirements as set forth within the Colorado Revised Statutes. By recording the transactions in general compliance with this law, the revenues and expenditures can be more easily monitored on a monthly basis to ensure compliance with the legal requirements as set forth within the Colorado Revised Statutes. 2. GAAP - At the end of the fiscal year, adjustments are made to present the financial information in a format that is comparable to that used by other local government units around the country. The standards for this reporting are referred to as GAAP. The adjustments to convert the Town’s financial records from “budget basis” to “GAAP basis” are made to ensure that the Town’s financial statements are fairly and consistently presented in conformance with GAAP. IV. Internal Control Structure The Town maintains an internal control structure consisting of the following three elements: a. Control Environment – an overall attitude and awareness of actions as they influence the Town. b. Accounting System – an effective accounting system which results in identification and recording of all valid transactions, description on a timely basis of the type of transaction in sufficient detail to permit proper classification of the transaction for reporting purposes, recording of the transaction in the correct time period and proper presentation of all transactions and related disclosures in the financial statements. c. Control Procedures – proper authorization of transactions and activities, adequate segregation of duties, adequate documentation and records, adequate safeguards regarding access and use of assets and records, and independent checks on performance. Funds are 5 | Page categorized by standard GAAP functional classifications; and the development of new funds, departments, programs and accounts shall be approved by the Finance Department. Each fund in the Town’s budget will have an introductory statement of purpose which shall consist of the intent of the fund; sources of revenue and restricted revenues, if any; required reserves and justification for such reserves. V. Financial Monitoring The Town Manager is charged with the primary responsibility for monitoring the fiscal implementation of the approved budget. In addition, the Town Manager and Finance Manager will work closely with other departments to apprise them of their financial status and of any potential issues that may affect their budgets. The Town Manager and the Finance Manager will review fiscal issues affecting any part of the Town’s organization. This activity supports the monitoring role and focuses on the protection of Town assets and the legal, efficient, and effective use of Town resources. Together, the Town Manager and the Finance Manager will provide the Town Board with regular reports on the Town’s finances including a financial report containing budget versus actual revenue and expenditures information. Individual departments are responsible for monitoring and managing their resources to ensure that the legal and administrative appropriation to the department is not overspent and that all expenditures and uses of Town resources are in conformity with Town, State, and Federal ordinances, statutes, policies, and regulations. 1. Legal Appropriation - Each department is responsible for ensuring that expenditures do not exceed the legal appropriation level for their department within each fund (operating and capital expenditures combined). 2. Revenues - Each department is responsible for monitoring revenues that are collected as a result of programs administered. VI. Audit Colorado statutes, along with Federal laws and regulations will be followed wherever they apply to the financial activities of the Town. The source of historical financial information will be located in the central accounting system as operated and maintained by the Finance Department. The source of all current and future budget information, including spending plans, revenues, and expenditures, is the annual budget document. a. Internal Audit - The Town’s Finance Department and Independent Auditors evaluate the adequacy of financial controls, systems, records and organizational operations. They provide the Town Board with management and employees objective analysis, appraisals and recommendations for improving systems and activities. b. External Audit - In accordance with Federal law and State statutes, an annual external audit will be performed by an independent public accounting firm with the subsequent issuance of a financial report and opinion. c. Single Audit - Per the Federal Office of Management and Budget (OMB) Circular A-133, all non-federal entities that expend $500,000 or more in a year with Federal awards, either as the grantee or the sub-grantee, shall have a single or program-specific audit conducted for that year in accordance with the provisions of the circular guidance. The single audit encompasses both 6 | Page the entity’s financial statements and the federal awards received by the entity; whereas a program-specific audit will audit one federal program and can only be used when the grantee receives grant awards only from one federal program. Section 3 - Budget Policy I. Overview The annual budget is an operational tool which provides the Town Board and Manager with the financial information necessary to guide resource allocation to accomplish the goals and objectives of the Town. The budget, along with the annual appropriation including supplemental appropriations, provide the basis for the control of expenditures and set the Town’s financial guidelines. Basic legal requirements and budget processes are defined by the State and Town Code. II. Budget Philosophy The Town is committed to developing a sound financial plan for the operations and capital improvements that meet the Town’s Comprehensive Plan goals. The Town provides a wide variety of services to residents and visitors. It is the responsibility of the Town Board to adopt a budget that provides resources to best meet the service needs for the overall good of the community. To achieve this, the Town: a. Utilizes conservative growth and revenue forecasts; b. Prepares plans for operations and capital improvements; c. Allows staff to manage the operating and capital budgets, with the Town Board approving the allocations for both; d. Adopts financial policies; e. Establishes budgets for all funds based on adopted policies; f. Appropriates the budget in accordance with the Town Code and State law; g. Develops a budget that minimizes adverse impacts to the community and plans for the uncertain and unpredictable by establishing and funding adequate reserves in each major fund. III. Budget Preparation Process The Town identifies important community outcomes and develops a financial and service delivery plan to achieve those outcomes. The Town Board allocates funding based on current priorities and results. Each year, the Town Manager prepares a forecast for the following year’s budget. In July, the Town Manager prepares a ten year budget projection with the Town Board’s budget objectives and guidelines for developing the following year’s budget. 7 | Page In July and August, departments develop revenue and expense projections for the following year and submit them to the Town Manager. Not later than October 15th the Town Manager submits a preliminary budget to the Town Board for review. In November, the citizens of Fraser provide their feedback on the proposed budget when the Town Board holds its Budget Hearings on the proposed budget. By the first meeting in December, or earlier when possible, the Town Board adopts the budget and commits appropriations by ordinance. By State statute December 31st the Town Board must adopt the following year’s budget and no later than December 15th property taxes must be levied to the County for collection. Any revisions to the current year’s budget must be adopted with the next year’s budget, if not earlier. Revisions shall be adopted on a per line item basis versus any wholesale revised budget protocol, this allows for transparency to the community at large. IV. State Statutory Requirements The State Statute indicates that no later than October 15 of each year, the budget shall be submitted to the governing body. As a result, the Town Manager and Finance Manager present the recommended budget for the ensuing fiscal year to Town Board no later than October 15th of each year. V. Town of Fraser’s Code Requirements Budget Fiscal Year – Fraser Town Code Section; “The fiscal year of the Town shall commence on the first day of January and end on the last day of December of each year.” Section 4 - Debt Policy I. Overview The Town recognizes the primary purpose of “facilities” is to support the provision of services to its residents. The Town must balance debt financing and "pay-as-you-go" methods to meet the capital needs of the community. The Town realizes failure to meet the demands of growth may inhibit its continued economic viability but also realizes too much debt has detrimental effects. Historically, the Town’s total bonded indebtedness has been limited. The Town uses lease purchase financing for several purposes including the acquisition of real property and the replacement of equipment and vehicles. Lease purchases decrease the impact of the cost to a department by spreading the costs over several years, and are subject to annual appropriation by the Town Board. II. Town of Fraser Code Requirements Debt Limitations a. No bonds or other evidences of indebtedness, payable in whole or in part from the proceeds of ad valorem property taxes or to which the full faith and credit of the Town are pledged in writing or otherwise shall be issued, except in pursuance of an ordinance authorizing the same, and unless the question of the issuance of the bonds shall at any special or general municipal election be submitted to a vote of the qualified electors of the Town and approved by a majority 8 | Page of those voting on the question. However, the Town Board pursuant to Town Code and without election may: Issue local improvement district bonds; Borrow money or issue bonds for the purpose of acquiring, constructing, extending or improving water, electric, gas, sewer, or other public utilities or income-producing projects provided, further, that said borrowing shall be repaid and said bonds shall be made payable solely out of the net revenue derived from the operation of the utility, utilities, or other income-producing projects, or any or all thereof. Net revenue shall mean gross revenue less all operation and maintenance expenses of the project for which the money has been borrowed or bonds issued. b. The Town shall not become indebted for any purpose or in any manner to an amount which, including existing indebtedness, shall exceed 3% of the assessed valuation of the taxable property within the Town as shown by the last preceding assessment for Town purposes provided; however, that in determining the amount of indebtedness, there shall not be included within the computation of indebtedness local improvement district bonds, revenue bonds, or general obligation bonds or other evidences of indebtedness issued for the acquisition, construction, extension, or improvement of water or wastewater facilities or supplies, or both. III. Security and Exchange Commission (SEC) Rule 15c2-12 “Municipal Securities Disclosure” Requirements As a means reasonably designed to prevent fraudulent, deceptive, or manipulative acts or practices, it shall be unlawful for any participating underwriter (broker, dealer, or municipal securities dealer) to act as an underwriter in a primary offering of municipal securities with an aggregate principal amount of $1 million or more unless the participating underwriter complies with SEC Rule 15c2-12 requirements or is exempted from the provisions of the Rule. The Town is committed to providing timely and consistent dissemination of financial information with SEC regulatory requirements. It is imperative that disclosure be accomplished in a timely fashion in accordance with SEC required SEC Rule 15c2-12 compliance and the Town’s Disclosure Dissemination Agent Agreement (DDAA). This disclosure policy confirms the Town’s commitment to fair disclosure. Its goal is to develop and maintain guidelines for presenting related financial reports and events to interested third parties, financial institutions and the general public. This policy covers all Town employees and elected officials of the Town of Fraser. It covers disclosure documents filed with the SEC, statements made in the Town’s Audited Financial Statements, and any unaudited interim reports. Section 5 – Cash Management Policy I. Scope The Town recognizes that effective cash management is an integral component of sound financial management. II. Cash Deposits and Receipts 9 | Page a. Departments collecting cash receipts, whether in cash or other forms of payment, must turn in such receipts to the Finance Department on a daily basis together with records required to verify accuracy of such collections. b. Departments authorized to make deposits will promptly submit bank deposit receipts and daily cash reports to the Finance Department to verify the accuracy of collections. c. The Finance Department will set forth general cash handling procedures to be followed for all Town departments. Departments may have more restrictive policies but will not have less restrictive policies as set forth from the Finance Department. Section 6 – Investments I. Investment Policy Existing State Statutes provide standards for cash and investment management operations. The Town will invest in securities in a manner authorized by Colorado statutes. The purpose of the Towns Investment Policy is to establish the investment scope, objectives, delegation of authority, standards of prudence, reporting requirements, internal controls, eligible investments and transactions, diversification requirements, risk tolerance, and safekeeping and custodial procedures for the investment of the funds of the Town of Fraser. Section 7 – Fund Balance Policy I. Overview The Town’s Fund Balance is the accumulated difference between assets and liabilities within governmental funds. A sufficient fund balance allows the Town to meet its contractual obligations, provide funds for new and existing programs established by the Town Board, mitigate negative revenue implications of federal or state budget actions, mitigate local economic downturns, fund disaster or emergency costs, provide funds for cash flow timing discrepancies and fund non-recurring expenses identified as necessary by the Town Board. II. Governmental Fund Balance Type Definitions The Governmental Accounting Standards Board (GASB) issued Statement Number 54, “Fund Balance Reporting and Governmental Fund Type Definitions” effective for periods after June 15, 2010. The objective of this Statement was to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This Statement establishes limitations on the purposes for which Fund Balance can be used. a. Non-spendable Fund Balance – Some assets reported in governmental funds may be inherently non-spendable from the vantage point of the current period. - Assets that will never convert to cash such as; prepaid items or inventories, - Assets that will not convert to cash soon enough to affect the current period such as; non-financial assets held for resale, 10 | Page - Resources that must be maintained intact pursuant to legal or contractual requirements such as; capital of a revolving loan fund b. Restricted Fund Balance – This represents the portion of fund balance that is subject to externally enforceable legal restrictions. Such restrictions are typically imposed by parties altogether outside the Town such as creditors, grantors, contributors or other governments. Restrictions can also arise when the authorization to raise revenues is conditioned upon the revenue being used for a particular purpose. c. Committed Fund Balance – This represents the portion of fund balance whose use is constrained by limitations that the Town imposes on itself by the Town Board (highest decision making level) and remains binding unless removed in the same manner. The Town does not use committed funds in its normal course of business. - Requires action by the Town Board to commit fund balance - Formal Town Board action is necessary to impose, remove or modify a constraint reflected in the committed fund balance d. Assigned Fund Balance – This describes the portion of fund balance that reflects the Town’s intended use of resources. Representing the current years funded and approved budget and or amended budget. e. Unassigned Fund Balance – The residual portion of fund balance. III. General Fund Unassigned Fund Balance A priority goal of the Finance Manager is to improve the long-term fiscal health of the Town. Revenue projections are conservative and authorized expenditures are closely monitored and projected. In stable economic times, the combination of these two strategies leads to revenue collections higher than actual expenditures. Net revenue (actual revenue collections less actual expenditures) is available to first fund the required restricted reserves the Town is legally obligated to meet, and then to the committed reserves. Year-end balances in the unassigned reserves may be used as a funding source in the next budget year. The Town’s policy is to accumulate adequate committed reserves to protect the Town during economic downturns or large scale emergencies. The Town will achieve a committed General Fund balance of one million dollars, or an amount equal to 3% of assessed value of the Town. The Town also maintains reserves that are required by law or contract and that serve a specific purpose. These types of reserves are considered committed and are not available for other uses. Within specific funds, additional reserves may be maintained according to adopted policies. The Government Finance Officers Association (GFOA) is a professional association of state and local finance officers in the US and Canada whose members are dedicated to the sound management of government financial resources. GFOA recommends that “governments establish a formal policy on the level of unrestricted fund balance that should be maintained in 11 | Page the General Fund.” The GFOA recommended, at a minimum, that general-purpose governments, regardless of size, incorporate in its financial policies an unassigned fund balance in their General Fund be no less than three months of regular general fund operating revenues or regular General Fund operating expenditures. The Town will maintain an unassigned fund balance (the balance of funds after all restrictions and reserves have been assigned) equal or greater than four months of budgeted expenditures. In addition the Town will maintain a committed fund balance equal to one quarter of the projected sales tax collections for the year for General Fund emergencies. Additionally a committed fund balance equal to or greater than twenty-five percent (25%) of the insured value of capital assets owned by the General Fund, these funds can be reduced once adequate reserves are collected within the CAF, and the CERF. IV. Other Funds a. Enterprise and some Special Revenue Funds - Reserves within the Water and Waste- water Enterprise Funds provide for unexpected revenue losses or unanticipated expenditures during the year, capital projects and future system enhancements and requirements. A portion of these reserves may be appropriated as part of the annual budget and may be utilized at the end of the fiscal year if necessary. In addition the Water and Wastewater Funds will have a committed fund balance for operational emergencies of five hundred thousand dollars ($500,000.00) each. Both Enterprise Funds will maintain a committed fund balance of five hundred thousand dollars plus twenty-five percent (25%) of the value of the depreciated system value for capital projects. This committed fund balance will also increase as the Fund will attempt to operate on a “pay-as-you-go” manner based upon a five year capital investment project schedule as maintained by the system operator. In addition the Water and Wastewater Funds will have an unassigned fund balance equal to or greater than four months of operational expenditures of the budget year. When unexpected repairs/enhancements or unfunded mandates require expenditures in either enterprise exceeding the committed fund balance by 50% the fund will be authorized to issue debt if this is in the long range best interest of the fund. In addition, the Wastewater Fund will maintain a committed fund balance of at least one million dollars, designated for the Joint Facilities Fund Capital Replacement Reserve and Capital Investment Plan projects. b. Internal Services Funds - Internal Services Funds are expressly designed to function on a cost reimbursement basis and should not accumulate a significant reserve. A small reserve is appropriate to allow for differences in timing of revenues and expenditures. Currently the Town does not utilize Internal Services Funds (ISF) – although our Joint Departments with the Town of Winter Park could be assumed to be ISFs. c. Self-Insured Fund Reserves - As required by the State of Colorado Self Insurer’s Reserve Trust Agreement, the Town would maintain a fund balance reserve for Liability and Workers Compensation. Currently the Town of Fraser does not self-fund its insurance liabilities. 12 | Page IV. 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. The amount of restricted fund balance is established by bond ordinance for each fund in association with each bond issuance. At times, it may be desirable to use bond insurance rather than debt reserves. This is usually based on the recommendation from our Financial Advisor. V. Use of Fund Balances Available fund balances shall not be used for ongoing operating expenditures. Section 8 - Capital Improvement Program Policy I. Overview The Town has a significant investment in its streets, facilities, parks, natural areas and other capital improvements. In past years, the Town Board and the residents of Fraser through their actions have demonstrated a firm commitment to and investment in Town capital projects. II. Five Year Capital Improvement Plan (CIP) The Town will maintain government wide capital project plans encompassing a five year planning window. These strategic plans will include projects outlined in the Town’s Comprehensive Plan along with the Enterprise Fund’s municipal needs. III. Funding Sources and Requirements All Town capital improvements will be constructed and expenditures incurred for the purpose as approved by the Town Board, with funds rolling over from year to year until a project is deemed complete, otherwise remaining budgeted funds will return to the appropriate funds unassigned or committed fund balance. The Town will use a variety of different sources to fund capital projects, with an emphasis on the “pay-as-you-go” philosophy. Funding for future operating and maintenance costs for approved capital projects must be identified at the time projects are approved. Future revenues should be identified for the associated operation and maintenance charges for the approved projects/investments in the Town’s ten year budget worksheet. Section 9 - Revenue Policy The Town shall strive to maintain a balanced and diversified revenue structure to protect the Town from fluctuations in any one source due to changes in local economic conditions which adversely impact that source. 13 | Page Revenue estimates will be conservative and based upon trend analysis, economic conditions and other factors. Estimates will be established by the Finance Manager and reviewed by the Town Manager. Non-recurring (one-time) revenues and other financing sources will not be used to finance ongoing operations. Federal aid, state aid, gifts, and grants will be accepted only after an assessment is made of potential cost implications. The Town will review its fees and other charges for services annually to ensure that revenues are meeting intended program goals and are keeping pace with inflation, other cost increases and any applicable competitive rate. The Town will evaluate cost recovery and align fees with cost recovery goals. Enterprise and Internal Service operations will be self-supporting. Section 10 - Expenditure Policy The Town will pursue goals of efficiency and effectiveness by balancing short-term and long- term community needs. Current operating expenditures will be funded with current operating revenues, approved grants, or the use of unassigned fund balance in accordance with fund balance policies. The Town Manager and Finance Manager will monitor revenues and expenditures during the year to provide an opportunity for actions to be taken to bring expenditures in line with revenues received. The Town will undertake periodic reviews of Town programs for both efficiency and effectiveness. Programs that are determined to be inefficient and/or ineffective shall be reduced in scope and eliminated. Privatization and contracting with other governmental agencies will be evaluated as alternatives to service delivery. Section 11 - Grants Policy Grants will follow all regulations included in the grant contract. Town Departments and staff that occupy positions of responsibility with respect to grant activity have specific roles and responsibilities that they shall perform and uphold both ethically and in the best interests of the Town. a. Grants will be spent for the purposes intended and will not be relied on for basic General Fund services. b. The Town will review grants for operating programs on an individual basis to determine suitability of accepting the grants from a sustainable long-term financial perspective. c. The Town will vigorously pursue grants for capital projects that fit long-range community improvement goals. 14 | Page d. All potential grants will be carefully examined for matching requirements; both dollar and level-of effort matches. Section 12 - Identify Theft Prevention Policy In 2008, Congress directed the Federal Trade Commission (FTC) and other agencies to develop regulations requiring “creditors” and “financial institutions” to address the risk of identity theft. The resulting Red Flag Rules requires all such entities that have “covered accounts” to develop and implement written identify theft prevention programs. The FTC defined “creditors” as businesses or organizations that regularly defer payment for goods or services and bill customers later. This includes nearly any organization extending credit, whether by granting loans, making credit decisions, etc. Pursuant to the FTC enforcement policy of the Identify Theft Red Flags Rule, the Town of Fraser will evaluate risk factors to develop and implement a policy designed to help identify, detect, and respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identify theft. Specifically the Town of Fraser has identified that access to account information in its water and wastewater utility system and its accounts receivable customer information as proprietary data and is not released unless and as requested by law enforcement or additional court orders. ITEM DESCRIPTION PROPOSAL 2016 BUDGET IMPACT GENERAL FUND - ADMIN Economic Development 80% of the General Fund expenditures are funded by sales tax revenues. Less than 10% of the GF expenditures are dedicated to supporting our retail business community. These include Chamber, Transit, Garden/Streetscape, and Enhancement Grants. While many other GF expenditures, such a street and snow management, are necessary for local business viability, these are not included in the above number. The 2015 Workplan should include expansion of economic development programs and policies. The 2015 Budget should include additional appropriations to fund programs that result from these efforts. Such programs could include expansion of the business enhancement grant program, new visitor wayfinding program, and incentive programs. $100,000 Grand Enterprise Inititiative The Grand Enterprise Initiative is a grassroots economic development program that offers free and confidential business management coaching to anyone who wants to start or expand a business in Grand County. In Fraser, the initiative has worked with 10 clients for business tune-ups, expansions and one relocation of a business from Granby to Fraser. Enterprise facilitation is a one-on-one business management coaching program developed by the Sirolli Institute. The Grand Enterprise Initiative has worked with clients in Fraser since going countywide in 2012. The free and confidential business coach, Patrick Brower, has had a total of 54 client visits with Fraser-based entrepreneurs. They would like the town of Fraser to consider collaboratively funding the Grand Enterprise Initiative in 2015 for the amount of $5,000. The Grand Enterprise Initiative’s other funders include the Town of Granby, Grand County, the Town of Winter Park, the Grand Foundation and the Freeport-McMoran Copper and Gold Foundation. They are also pursuing funding from each of the towns in Grand County for 2015. $5,000 Records Management Initiative In 2007 we initiaited significant changes to our records management systems. Prior to that a Records Retention Schedule was adopted in 2005 and documents were retained with traditional filing systems (cabinets and boxes in basement). Today approximetly 75% of our records are managed digitally and staff is currently implementing upgrades to to fully integrate digital records management and workflow. This is being coordinated with similar efforts in GIS and Clarity. In addition to the obvious improvements to a basic adminstrative function, this increases productivity and public accessibility In 2016 we'll continue with implementation of the programs from 2015, a goal for the not too distant future being increased records accessibility via our website $0 Community Broadband Enhancements Broadband, and wifi access, is important infrastructure in today's communities and economy. While varying degree's of broadband are available, enhancements are necessary to meet current demands and expectations Investigate and pursue other options to implement enhanced broadband and community wifi. $250,000 Public Art In the late 1980's thru the early 2000's the Town of Fraser was engaged in a community public art program with Jim Hoy. Currently, we are limited to Hoy's art at the Walk Through History Park, and minautures of Hoy's works are located in various public facilities. In 2004, the Town seeded, and the Fraser Valley Lions completed, the "Ike Fishin the Fraser" sculpture adjacent to the Lions Ponds. The installation of the Goranson Station Shelter has community members once again discussing public art installations Establish Arts Commission. Solicit Proposals for CR 804 Bus Shelter? $0 Transit Current funding for First Transit totals $65,000. Winter Park Resort funds $1,200,000 and the Town of Winter Park funds approximately $400,000 annually. Pending outcome of the November election… $350,000 Eisenhower Feasibility Study This study would look at feasibility, community impacts and cost estimates related to installation of a traffic signal at Eisenhower and US 40 and a whistleless crossing at the railroad. Funding alternatives for the improvements would also be discussed as part of the study phase (estimates range between $450,000 and $1,000,000) Reqests for Proposals were solicited and two Proposals were received, funding for the study would be added to the budget and Workplan $20,000 Open Space Our open space assets set the community apart from others and are among the greatest contributors to local quality of life. With the exception of a dog park, prior plans and community visions have been implemented. An update of future plans is appropriate Develop Open Space Plan $50,000 Playgrounds The Town of Fraser currently has three playgrounds which are between ten and fifteen years old. Updates, replacements, and enhancements are warranted Incorporate into Open Space Planning effort $0 Fraser Pond #1and 2 The Town of Fraser has a recreational lease agreement with Grand County Water and Sanitation District #1 to allow public use of these pond that offer a unique recreational opportunity. The parking area is located on a portion of the property that the District does not need and would like to sell. The Town should acquire the parcel for open space parking purposes Incorporate into Open Space Planning effort and initiate efforts to obtain grant to underwrite the purchase. This work should also incorporate funding additional recreational amenities around the ponds. $0 Comprehensive Plan Update The Plan was most recently updated in 2010, and a five year update is merited in 2015. Additionally, staff recommends including sub-area planning for downtown/old town Fraser. This should also include provisions for code amendments that are appropriate and necessary to implement community vision The last two Plan updates were handled by staff in-house, and a general update could be managed similarly. However, to effectively address old-town/downtown consulting planners would be recommended $100,000 Community Image/Vision/Branding While diversity is one of Fraser's greatest strengths, the lack of common vision and goals among the community, and accordingly reflected on the Town Board, is an obstacle to defining and then accomplishing community goals Work with consulant to facilitate community dialogues and idenfication of community identity and image that can help guide future decisions $25,000 Property Maintenance - Community Beautification In 2007, the Town initiated efforts to encourage improved property maintenance and compliance with the Town Code. These efforts provided tangible results, but a broader and more focused effort may be timely/appropriate This would be a staff workplan item, but would involve the potential for significant legal expenses (code amendments and prosecution) $20,000 Hazard Tree Program While many areas in the community are free from hazard tree problems, it is a problem Upper Ptarmigan and some areas within/around Rendezvous and Grand Park (inc Sumrall). Work with Colorado Forest Service to develop routine evaluation/identification of hazard trees. Proactively remove from public property and assist private property owners with program to facilitate removal of hazard trees on private property. $10,000 Town Board Compensation The Town Board compensation has not be changed since 2005 and given time dedicated to service, this should be considered for 2015. Currently, Mayor receives $120 per meeting, and Trustees $100 per meeting. Any changes adopted in 2015, would not become effective until 2016 for Trustees elected/re- elected in 2016 Consider increasing compensation for elected officials that becomes effective in 2016 and 2018. $0 New Community Event It was proposed in 2013 that we implement a new community event that would showcase Fraser's community and quality of life, as a great place to do business and live $10,000 GENERAL FUND - PUBLIC WORKS Public Works Staff Staffing levels are short of demand/workload. In 2013/2014 changes required to improve water and sewer administration and operations resulted in a shortfall in snow management operations. Our night shift is also in need of a second operator for effective operations and safety. We also believe we need additional human resources to address open space and summer/winter trail operations effectively. One new full time year round Operator position $95,000 Trail Wayfinding In collaboration with Headwater Trails Alliance and the Town of Winter Park, in 2014 trail wayfinding signage was installed along the Fraser River Trail and the Fraser to Granby Trail. This was anticipated to be the first phase of a comprehensive program Implement Phase 2, additional trails within Fraser that connect to those outside town. Implement at least one kiosk of the three planned. $20,000 Trail Snow Grooming Since 2006, the Fraser River Trail has received snow grooming services via volunteer programs and with the in recent years with oversight of Headwater Trails Alliance. Headwater Trails Alliance proposes to enhance service on this popular winter trail via contract services to provide more reliable and consistent operations (this would be funded from the Admin IGA line) $10,000 Public Works Facility Our current Public Works Facility is outdated and undersized to serve both the current and future demands. We would like to wrap up programming and planning efforts that were shelved due to the annexation related matters so that we can pursue property and funding necessary to provide for effective operations Renew and complete programmatic and planning efforts with consulting team. Property and facility funding needs would be addressed thereafter. $20,000 Outdoor Activity Center Parking Lot The parking lot at 120 Zerex is in need of replacement. The proposed work would include drainage improvements (removal of the swale in the center that tends to catch more vehicles than water). While doing this work, an overlay of Clayton court would also be recommended ($25,000 of the proposed total cost) $80,000 Byers Avenue On Street Parking Byers Avenue, between Doc Susie and Railroad, has seen the impacts in recent years of successful business at Sharkey's and Serene Wellness. Given the cars parked along the street, at times the travel lane is restricted. Additionally, drainage improvements are needed to address drainage problems along the north side of the street Expand the pavement width to provide for better on street parking and incorporate drainage improvements $20,000 Alternative Fuel Vehicles and Fueling Stations The Town of Fraser currently falls below threshholds that would require these for our fleet, but we could pursue on our own initiative Establish a target goal that we incorporate these systems into our operations (both vehicles and fuelding stations). Given our shorter trips, use of heavy equipment, and retired polic vehicles for admin there are challenges. Nonetheless, the first step would be to establish a goal. $10,000 Street Light Replacement Program Current street lights were installed prior to many current dark sky compliant standards and energy efficiency standards. Replace all street lights (both utility and decorative) with dark sky compliant and energy efficient fixtures. Grant funding may be available to assist in cost controls. Project could be phased over multiple years. $70,000 FroDo The of Fraser acquired the north half of the block bounded by US40, Doc Susie, Fraser, and Eastom given its significance to the ultimate development of "downtown Fraser." Economic conditions prevented development of the property, but to date the Town has not developed a near term plan for the property. Minor investment in the property could still provide for a future redevelopment yet provide tangible benefits today Develop a short term strategy for the property and implement improvements to the property $50,000 804 Trail Improvements In conjunction with the CR 804 Street Project, it may be possible to improve pedestrian access around this area. Given the way the area was platted and developed, pedestrian access has been less than desirable Completing sidewalks around the perimeter of the Holiday Inn Express property was previously studied, along with other streetscape improvements at the other three corners of the intersection (this could be phased too) $350,000 804 Bus Shelter With the 2014 investment in transit facilities comes demand and desire for improvements at other shelters. Currently, this bus stop is most in need of improvement Complete site and shelter improvements. Solicit design proposals. $20,000 Streetscape In 2013/2014 new banners and flags were purchased. Our holiday decorations have received minimal investment over the years, and a comprehensive plan for banners, flags, decorations, benchs, trash/recycling receptacles, etc is in order Planning initiative with business community followed by appropriate investment/re-investment $10,000 Gardening Program Our gardening program is one of the more popular Town programs, but may be underfunded. This program includes the noxious weed management program. Current annual investment in the program is under $60,000. Provide additonal funding for capital projects and improvements including planters, landscape beds, and programming $25,000 US 40 Pedestrian Overpass Currently, pedestrians in old town Fraser are limited to two crosswalks on US 40. Safe pedestrian crossings will be provided at the South end of Town via the Fraser US 40 Improvement Project. Additonal crosswalks are not likely to be approved by CDOT. Additional crossing opportunities and community icons could be provided via overpasses. Design/Implement pedestrian overpass $250,000 Train Station Enhancements and Railroad ROW improvements After ten years effort, it is clear that to complete any significant improvements to the Amtrak Platform and associated parking and landscape areas (one of our "front doors"), the Town will need to commit significant effort and funding to address Union Pacific requirements Town obtain permits for work in UP ROW and contract for work. $50,000 Jones-Powers Drainage Swale and Easement This is a drainage swale along the west side of old town that is a component of our master drainage plan. It has not been implemented due to lack of proper easements and funding constraints. Obtain easement and contract project. $50,000 Mill Ave at Divide/Baptist Church Drainage This is another component of our master drainage plan that has not been implemented due to lack of proper easements and funding constraints Obtain easement and contract project. $175,000 Johns Drive pavement and drainage improvements This is another component of our master drainage plan that has not been implemented due to lack of proper easements and funding constraints Complete design engineering and contract project. $50,000 Mountain Man Park Shed One of the historic sheds from the Cozens Ranch remains as an amenity of the park, but for safety reasons access has be closed off Install a new context sensitive roof and open the facility to the public $15,000 GENERAL FUND TOTAL:$2,310,000 Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com MEMO TO: Mayor Smith and the Board of Trustees FROM: Nathaniel Q. Havens, Finance Manager DATE: November 4th, 2015 SUBJECT: Town of Fraser Finance Policies and 2016 Budget MATTER BEFORE THE BOARD: The Board will hold its first Public Hearing on the Proposed 2016 Budget. Concurrently the Board has been presented with an initial 2016 budget spreadsheet – in our typical 10 year planning tool model. A Financial Policies Reserve Appendices has been included for the Boards consideration as an addition to the 2016 Financial Policies. ACTION REQUESTED: The Board will hold the first Public Hearing on the Proposed 2016 Budget. The Board will receive community input and have their own discussion regarding the 2016 Budget. It is recommended that the Public Hearing on the Proposed 2016 Budget be continued to November 18th, 2015. Approval of the new Finance Policies and newly included Reserve Policy Appendices is suggested by staff. EXECUTIVE SUMMARY: This is the first Public Hearing for the 2016 Budget, additional hearings are scheduled for November 18th and December 2nd, with Budget adoption anticipated for December 2nd. A preliminary Budget and supplemental materials were provided to the Town Board on October 15th for the October 21st meeting. Additional materials are provided with this packet. In addition to Board discussion, public comment may be presented during the hearing. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com BACKGROUND: Included with this staff briefing is the Financial Policies Reserve Appendices which outlines the reserve policy discussion from the last Board meeting. Reserve policy metrics are called out with the equations and resulting reserve dollar amounts. Budget Hearings will be held on November 4th and 18th along with a hearing and the adoption of the revised 2016 Budget on December 2nd, 2015. Budget – the 2016 preliminary budget as presented to the Board on October 21st represents a baseline budget, with the following clarifications: Revenues: I have conservatively budgeted for revenues in 10-31-410 Use Tax – Building Materials at the present time I do not have adequate estimates from builders about their proposed 2016 projects. Similarly I have done the same thing and for the same reason as above in 55-34-200 Plant Investment Fees (WWF). All other revenue line items have been budgeted with less restraint – and perhaps higher than I normally would. General Fund: 10-41-871 Business Enhancement Programs - $25k Economic Development, $25 outside Consulting and $5k for Grand Enterprise Initiative. 10-60-725 Street Improvements - $250k - CTYRD 8 Bridge, $25K normal street supplies and $50k miscellaneous streets repairs. 10-90-930 Transfer to CERF – a $60k transfer is included to begin re-building our PW- CERF, I anticipate large expenditures over the next 10 years as we re-build our fleet of heavy equipment and work trucks as the current fleet has an average of roughly 9 years – some units are far older and a few younger. Presently Un-Funded in the 2016 Budget: Additional Town Board Wish List Items Adequate street maintenance funds Clayton Court entry and the Outdoor Activity Center’s Parking Lot replacement Public Works Facility earmark Water Fund: 50-40-730 Capital Projects – Various projects are identified for 2016 totaling $250k 50-40-760 Firming – the $650k figure estimates the purchase price of augmentation water from Grand County #1 Water and Sanitation District. Town of Fraser PO Box 370, Fraser, CO 80442 office 970-726-5491 fax 970-726-5518 www.frasercolorado.com Wastewater Fund: 55-40-730 Capital Projects - $116.5k in capital projects as identified in the CIP and $130k Remainder of 2015 DOLA Project RECOMMENDATION: I would recommend that after discussion and public comment the Public Hearing be continued to November 18th. Government Finance Officers Association May 2013 A Risk-Based Analysis ofGeneral Fund Reserve Requirements A Case Study of the City of Colorado Springs Copyright 2013 by theGovernment Finance Officers Association203 N. LaSalle Street, Suite 2700Chicago, Illinois 60601www.gfoa.org By Shayne C. Kavanagh, Senior Manager of Research, GFOA Reviewers: Marc D. Joffe, Principal Consultant, Public Sector Credit Solutions, and Bill Statler, Consultant andTrainer; retired Director of Finance & Information Technology, City of San Luis Obispo, California. The GFOA would like to thank the City of Colorado Springs for allowing us to share this information, and PublicSector Digest for their assistance. The Research and Consulting Center is the management analysis and consulting arm of the GovernmentFinance Officers Association and is nationally recognized for its comprehensive analytical and advisory serv-ices, and specialized research on state and local government finance. Since beginning operations in 1977, theGFOA Research and Consulting Center has provided advisory services to hundreds of local, county, and stategovernments; public utilities; elementary and secondary education systems; and transit authorities. The GFOA’s Research and Consulting Center encourages enquires about this study or about repeating theanalysis for other governments — please contact Shayne Kavanagh at 312-977-9700 or skavanagh@gfoa.org. Executive Summary............................................................................................................4 1. Introduction ....................................................................................................................7 2. Primary Risk Factor Analysis ........................................................................................9 Revenue Source Stability ......................................................................................9 Infrastructure........................................................................................................14 Vulnerability to Extreme Events and Public Safety Concerns............................15 3. Secondary Risk Factor Analysis..................................................................................17 Leverage................................................................................................................17 Expenditure Volatility............................................................................................19 Growth of the Community....................................................................................20 Liquidity ................................................................................................................20 4. Recommendations ......................................................................................................22 Recommended Reserve Target for Colorado Springs........................................22 Other Ideas to Support the General Fund Reserve Strategy ............................26 Appendix 1. Sales Tax Revenues in Boulder, Colorado ................................................31 Endnotes ..........................................................................................................................32 The Case of the City of Colorado Springs 4 Executive Summary Reserves are the cornerstone of financial flexibility. Reserves provide a government with options for responding to unexpected issues and a buffer against shocks and other forms of risk. Managing re- serves, however, can be a challenge. The main question is how much money to maintain in reserve – how much is enough, and when does it become too much? This can be a sensitive question, since money held in reserve is money taken from constituents, and it can be argued that excessive reserves should be returned to citizens in the form of lower taxes. The City of Colorado Springs, Colorado, has been considering this question, especially in light of its volatile revenue portfolio and the fact that it cannot easily increase taxes to compensate for other changes in its financial condition; for example, the Taxpayer Bill of Rights – a statewide provision re- stricting all governments in the state from raising tax rates without voter approval – limits the City’s ability to increase taxes. The City engaged the Government Finance Officers Association to help pro- duce an answer. The GFOA is a non-profit association of approximately 17,500 state and local govern- ment finance professionals and elected officials from across North America, and a key part of its mission is to promote best practices and good public finance, including reserve policies. The GFOA worked with Colorado Springs to analyze the risks (based on the model originally de- scribed in the GFOA publication, Financial Policies) that influence the level of reserves the City needs as a hedge against uncertainty and loss. Three primary risks were identified: volatility of sales tax rev- enue; the potential for the City’s storm sewer and bridge infrastructure to fail; and the City’s vulnera- bility to extreme events such as wildfires, floods, and, to a lesser extent, snowstorms. Secondary risk factors were also examined, including cash flow and the potential for unexpected spikes in expendi- tures. In addition, a benchmarking survey of the reserves held by comparable cities provided context. CALCULATING THE RESERVE The GFOA reviewed three primary risk factors in order to assess the potential magnitude of the City's exposure. The "Triple-A” approach to accounting for uncertainties was an important part of GFOA's analysis. Accounting for Uncertainty – The “Triple-A” Approach Sizing a reserve requires estimating highly uncertain events, like natural disasters and economic downturns. To develop an adequate response, the GFOA used the “Triple-A” approach:1 •Accept. First, we must accept that we are subject to uncertainty, including events that we haven’t even imagined. •Assess. Next, we must assess the potential impact of the uncertainty. Historical reference cases are a useful baseline. •Augment. The range of uncertainty we really face will almost always be greater than we assess it to be, so we should augment that range. Historical reference cases provide a baseline, but that baseline may not be adequate to account for all future possibilities. 5 Revenue Volatility. The City’s primary concern was the volatility of sales tax income, and its most im- portant vulnerability in this area would be an economic downturn. The GFOA reviewed sales tax volatility back to 1996 in order to observe monthly variations and longer-term trends. Past experi- ences suggested that Colorado Springs should prepare for a 20 percent decline in sales tax revenues over 25 months as a plausible worst-case scenario; this would equal about $23 million in reserves. However, since the City would presumably reduce its spending in the event of such a severe down- turn, the reserve fund wouldn’t have to cover the entire decline in revenue. The City budget office es- timated that the budget could be reduced by almost $10 million without creating a major disruption to services (although there would of course be some degree of negative impact on service quality). Thus, Colorado Springs should maintain a reserve of at least $13 million to cover the remaining por- tion of the worst-case revenue gap and to help the City make a “soft landing” under those circum- stances. An additional $7.5 million is required to cover the other revenues that make up the general fund; these were found to be considerably less volatile than the sales tax. Infrastructure Risks. A government might need general fund reserves to repair or replace an asset that fails unexpectedly. In Colorado Springs, the two major asset classes deemed to have the greatest as- sociated risk were bridges and storm sewers. Thirteen bridge structures had a high risk rating, with an estimated replacement value of almost $23 million – an average of roughly $1.75 million per bridge. A reserve that covers one or two bridges should be adequate, but covering three might be more prudent, for a $5.25 million reserve. No installation dates or condition assessments were avail- able for the 406 miles of storm lines the City manages, but the estimated replacement cost for all storm sewers was a little more than $588 million.2 Since this lack of information made it impossible to assess the risk of failure, the best that could be done was to make an assumption. The GFOA did know that about 10 percent of the total dollar value of the City’s bridge inventory is in the higher-risk category, so it started with that number for storm sewers, which translates to $58 million. The rec- ommended reserve amount is about 20 percent of the high-risk bridges, which equates to $11.6 mil- lion for storm sewers. Extreme Events. Finally, the City is subject to extreme events that pose significant threat to life and property, particularly wildfires and floods. Historically, however, the financial impact of these events has been manageable. For example, the 2012 wildfire was the worst in Colorado history, but the total cost to the City was only $3.75 million – out of an annual budget of approximately $220 million. Of course, the scale of future events is uncertain, as is the timing of FEMA reimbursement and the por- tion of event response costs that would likely already be covered by existing budgeted resources. Tak- ing this into account, a reserve of $5 million to $7.5 million for extreme events appears reasonable. Adding It Up. The analysis above, along with the analysis of the secondary risk factors (particularly uncertainty regarding future payments for pension liabilities and expenditures for unfavorable law- suit judgments) led to the following reserve components. The GFOA further recommended that the reserve amounts be categorized by component, making the purpose of the reserve more transparent. For example, having a reserve for emergencies and a reserve for economic uncertainty would make their purpose more clear than one all-encompassing reserve.4 6 Budgetary Uncertainty Reserve $13 million for sales tax economic uncertainty + $7.5 million for economic uncertainty in other revenues + $6.25 million for pension payment uncertainty = $27 million, or approximately 12.5 percent of general fund revenues3 as budgetary uncertainty reserve Emergency Reserve $5.25 million for critical bridge failure + $11.6 million for critical storm sewer replacement + $5 million to $7.5 million for extreme events + $2 million to $4 million for expenditure spikes from lawsuits = $27 million, or approximately 12.5 percent of general fund revenues as an emergency reserve Combining the components gives us a target of approximately 25 percent of general fund rev- enues, which is in line with the range of reserves actually maintained by other cities that are compa- rable to Colorado Springs. It is also greater than the 16 percent the GFOA considers a minimum baseline level.5 7 1. Introduction Reserves are the cornerstone of financial flexibility. Reserves provide a government with options to respond to unexpected issues and afford a buffer against shocks and other forms of risk. Managing reserves, though, can be a challenge. Foremost is the question of how much money to maintain in reserve. How much is enough and when does a reserve become too much? This can be a sensitive question because money held in reserve is money taken from constituents and the argument could be made that excessive reserves should be returned to citizens in the form of lower taxes. The City of Colorado Springs (the “City”) has been considering this question recently, especially in light of the volatility of its revenue portfolio and the fact that the City cannot easily increase its taxes to compensate for other changes in its financial condition.6 The City engaged the Government Fi- nance Officers Association (GFOA) to help produce an answer. The GFOA is a nonprofit association of over 17,000 state and local government finance professionals and elected officials from across North America. A key part of GFOA’s mission is to promote best practices in good public finance, in- cluding reserve policies. The GFOA’s approach to reserves does not suppose “one-size-fits-all.” GFOA’s Best Practice on gen- eral fund reserves recommends, at a minimum, that general-purpose governments, regardless of size, maintain unrestricted fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures (i.e., reserves equal to about 16 percent of revenues).7 However, this 16 percent is only intended as a baseline, and it needs to be adjusted according to local conditions. To make the adjustment, the GFOA worked with the City to conduct an analysis of the risks that influence the need for reserves as a hedge against un- certainty and loss. A risk is defined as the probability and magnitude of a loss, disaster, or other undesirable event.8 The GFOA’s framework of risk assessment is based on the risk management cycle: identify risks; assess risks; identify risk mitigation approaches; assess expected risk reduction; and select and implement mitigation method. The framework focuses primarily on risk retention, or using reserves, to manage risk. However, the framework also encourages the City to think about how other risk management methods might alleviate the need to retain risk. For example, perhaps a risk could be transferred by The Origin of this Report This report was originally developed as a consulting product for the City of Colorado Springs. The City graciously gave the GFOA its permission to use the report for more general education and information sharing about risk- based assessment of reserve requirements. 8 purchasing insurance or relying on another organization or accounting fund to manage the risk. It might also be possible to avoid a risk by discontinuing activities that are creating a risk for the gen- eral fund. Hence, a thorough examination of the risk factors should not only help lead to customized reserve target size, but also should improve the City’s understanding of the risks it faces and its over- all financial risk profile. As a first step in this project, the GFOA conducted a basic review of the risk factors that generally in- fluence the amount of reserves a municipal government should hold.9 This review enabled the City and the GFOA to classify factors as either primary risks or as secondary risks. Exhibit 1.1 lists how the risk factors were classified. The next section presents an overview of the primary risk factors and the City’s level of exposure. The third section reviews secondary risk factors that have less weighty implications for the City’s general fund reserve strategy, but which still should be considered. The fourth and final section of the report presents the findings of the analysis, including a customized target reserve level for the City’s general fund and other ideas to improve the financial health of the City. Exhibit 1.1 Categorization of Risk Factors that Influence Reserve Levels for Colorado Springs Primary Risk Factors Revenue (Sales Tax) Volatility Infrastructure Upkeep Vulnerability to Extreme Events and Public Safety Concerns Secondary Risk Factors Leverage Expenditure Volatility Liquidity/Cash Flow Growth of the Community 9 2. Primary Risk Factor Analysis This section presents the three most important risk factors examined by the GFOA and the City’s ex- posure: the volatility of the City’s revenue portfolio, maintenance/replacement of the City’s infra- structure (focusing on bridges and storm sewers), and vulnerability to extreme events and public safety concerns. REVENUE SOURCE STABILITY Volatile revenue sources call for a higher reserve level in order to avoid the need for sudden service cutbacks should revenues drop unexpectedly. Some revenues are inherently volatile. The sales tax is usually considered to be a volatile revenue source because it is much more sensitive to swings in the economy than a revenue source like the property tax, for instance. This is an important consideration for Colorado Springs, considering that sales taxes (and the closely associated use tax) account for over half of the general fund’s revenues.10 No other revenue source comprises more than a fifth of general fund revenue (the next largest is transfers from other funds, at about 17 percent); the prop- erty tax, normally a large revenue source for municipal governments, accounts for less than 10 per- cent. This section will first analyze the volatility of the sales tax, as well as two closely associated revenues – the use tax and sales tax audit revenue. Following that, the stability of the general fund’s other im- portant revenue sources will be examined. Sales and Use Tax A first step is to understand the level and nature of volatility in the sales tax. The sales tax appears to follow fairly predictable seasonal patterns. Exhibit 2.1 shows annual sales tax revenues for 2007 through 2011 and Exhibit 2.2 shows monthly sales tax revenue since 2006.11 In Exhibit 2.1, use tax and revenues from sales tax audits are removed. These revenues add “noise” to the pure sales tax data, making it more difficult to analyze. They are also much smaller revenue sources – use tax is 7 percent the size of sales tax and audit revenues are 3 percent of all sales tax revenue. These revenues will be discussed later in the report. Exhibit 2.1 Five-Year Trends for Sales Tax 2011 2010 2009 2008 2007 Revenue $111,735,533 $108,212,533 $101,247,887 $107,356,298 $113,211,788 Annual Change 3.3% 6.9% -5.7% -5.2% 1.7% 10 The red circles in Exhibit 2.2 denote January revenues, which are always the highest of the year due to holiday shopping. The green circles show revenues from July, October, and April, which all see rev- enue spikes (due to quarterly sales tax filings for smaller vendors). This pattern and even the relative magnitude of the spikes are quite consistent from year to year, even as far back as 1996. In fact, a sta- tistical analysis shows that only a 2 percent change in sales tax revenue is attributable to random variation. About 91 percent is due to fundamental economic trends/business cycles (also known sim- ply as “trend-cycle”), and 7 percent is explained by seasonal variation.12 This means that random fluctuations in the sales tax should not concern the City. However, it also means that the influence of economic cycles is very strong. An unexpected shift in the economy could have serious ramifications for City revenues, as the City has experienced in the wake of the 2001 recession and the more recent Great Recession. Exhibit 2.3 (on the following page) shows the trend-cycle line for sales tax13 overlaid on monthly sales tax revenues. The red arrows show the begin- ning and end-points of significant downtrends. The first one started in April 2001 and lasted until May 2003. The trend-cycle declined 6.6 percent over 25 months, or about a quarter percent per month. The second started in July 2007 and lasted until April 2009. The trend-cycle declined 11.2 percent, or just over half a percent per month. Obviously, the decline associated with the Great Recession was much sharper than the 2001 reces- sion, both in terms of overall decline and speed of the decline. In fact, so severe was some of the fi- nancial fallout from the Great Recession that some have dubbed it what acclaimed financial thinker Nasim Talib has termed a “Black Swan” event – a rare and unpredictable event that has an extreme impact.14 Black Swans are, by definition, impossible to predict, so the best that anyone can do is to be prepared. The accomplished forecasting scientist Spyros Makridakis has suggested a “Triple-A” approach (described on the next page) for dealing with this kind of uncertainty.15 Exhibit 2.2 Seasonal Peaks in City Sales Tax Revenue There are four consistent spikes in sales tax revenue during the year, with January being the most important. The other spikes occur in July, October, and April. 11 1. Accept. First we must accept that we are subject to uncertainty. Even though the sales tax is subject to relatively little random variation, it is clearly subject to Black Swans. Because it is relatively easy to imagine scenarios that could cause the Colorado Springs economy to suffer (e.g., European financial crisis, federal debt crisis, a significant reduction in military spending due to federal budget shortfalls, etc.), we must also accept that the economy is subject to addi- tional potentially dangerous unknowns that we cannot imagine. 2. Assess. Next we must assess the potential impact of the uncertainty. Past history can provide a useful reference point. We saw earlier that a downturn in the trend-cycle has lasted as long as 25 months and has been as severe as a 0.53 percent monthly decline. The rate of decline is more relevant to the discussion of general fund reserves because a more protracted decline should be dealt with by restructuring the budget, not necessarily with continuous use of fund balance. Even so, it is important to consider both. 3. Augment. The range of uncertainty we really face will almost always be greater than we assess it to be, so we should augment that range. For example, we used the experience of the Great Re- cession as a reference point for our worst-case monthly decline (0.53 percent). However, many economists believe that the effects of the Great Recession would have been much worse had the federal government not taken the actions that it did.16 Who is to say that continued grid- lock in the federal political system (or other circumstances) won’t prevent an effective mitigat- ing response to the next crisis? As a rule of thumb, Makridakis suggests doubling your range of uncertainty if you have little historical data to rely on or multiplying it by 1.5 if you have more. We have a good deal of data, so a 1.5 multiplier seems appropriate, giving us a 0.8 per- cent monthly decline. That translates to a potential 20 percent decline over 25 months. This does not necessarily mean that the City should reserve this entire amount, though, because Exhibit 2.3 Sales Tax Monthly Revenue and Trend-Cycle The City has experienced two major downturns in the sales tax trend-cycle. The first one started in April 2001 and lasted until May 2003. The trend-cycle declined 6.6 percent over 25 months. The second started in July 2007 and lasted until April 2009. The trend-cycle declined 11.2 percent. 12 presumably, in the event of a financial Black Swan, the City would take action to reduce spending – not just continue to spend as it had before. The implications of the sales tax analy- sis, along with the other analyses performed by the GFOA, for the City’s reserve strategy will be addressed in the fourth section of this report. As mentioned earlier, audit revenues were removed from the sales tax data for purposes of this analy- sis. As Exhibit 2.4 shows, from 2007 through 2011, audit revenues ranged between $3.3 million and $2.2 million. It has experienced some fairly significant swings in this time as well. However, a $1 mil- lion potential for variation is probably not material in the entire City revenue portfolio. The City ex- pects sales tax audit revenues to continue into the future within the same general range that they have occurred in the past. Use taxes were also removed from the sales tax data. Exhibit 2.5 (on the following page) shows the five-year trend analysis for use taxes. Use taxes are not quite as volatile as audit revenues, but are still rather volatile. In fact, GFOA’s statistical analysis showed that almost 15 percent of the variation in use tax is attributable to simple randomness (compared to 2 percent for sales tax). However, more importantly, the use tax has experienced a notable decline since 2008. Examination of the long-term history shows that the revenue experienced a rapid increase in 2005, coinciding with the construc- tion boom and use taxes from commercial construction and manufacturing equipment. Revenue stayed at about this level until 2008, when tax revenue declined considerably as these industries ex- perienced a slowdown in their growth. Hence, the change we see in Exhibit 2.5 is less a product of random variation and more a product of a fundamental change in the tax base. Hence, use taxes have likely settled in at a new, lower level of yield that is reflective of reduced economic activity in com- mercial construction and manufacturing equipment (in fact, the lowest level since 1996). As such, there is probably little risk of another significant downside move.17 In fact, an analysis of the sources of the use tax shows that income from construction-related trades has fallen substantially in recent years. For example, revenue from building general contractors in 2011 was 12 percent of what it was in 2007, and revenue from subcontractors was 27 percent of 2007 levels. Also, total vacancy rates for commercial properties have hovered around 10 percent for the last two years, up from 7.7 percent in 2008. This indicates that there may be excess capacity in Colorado Springs, such that a significant uptick in building is not likely in the near term. Sales Tax Point of Comparison Appendix 1 provides a similar analysis of monthly sales tax data from the City of Boulder, Colorado, in order to provide a sense of context for how volatile sales tax revenue is in another jurisdiction. Exhibit 2.4 Five-Year Trends for Sales Tax Audit Revenue 2011 2010 2009 2008 2007 Revenue $3,284,390 $2,369,723 $3,250,245 $2,189,116 $2,210,099 Annual Change 32.8% -27.1% 48.5% -0.9% 51.3% 13 While sales tax is clearly the most important revenue, an analysis of reserve requirements should take account of other revenues as well, given that other revenues comprise half of the City’s budget. Below is a summary of other major sources of revenue and their associated volatility risk. Property Taxes. Property taxes comprise only about 9 to 10 percent of the City’s budget. The City has experienced a steady decline in property tax revenues in recent years, with a primary cause being a reassessment and lower property values owing to the decline in the housing market. Nationally, the housing market seems to have stabilized, at least to the point where another major decline is un- likely.18 An examination of Colorado Springs’ housing prices shows that Colorado Springs seems to essentially follow national trends.19 Charges for Service. Charges for service are about 6 to 7 percent of the general fund budget. Revenues from charges for service have fallen substantially in recent years, now budgeted at 70 percent of the 2009 actual revenues. This is mostly due to a sharp decline in charges for services for construction/development regulation. Hence, the user fees do have some vulnerability to economic cycles. A reserve could be useful, but the City might also consider other policies to mitigate risk. For example, a policy that sets cost recovery goals for fees would prompt a discussion of how to reduce costs if revenues were not up to expectations. Regardless, it may be helpful to have a small reserve in order to allow gradual adjustments to drop-offs in revenues. In recent history, the total charges for service revenues have dropped $3 million in one year. At this point, fees that are more sensitive to economic conditions (e.g., construction-related fees) have probably reached or are approaching a bottom. Accordingly, a $3 million reserve should probably be more than adequate. Intergovernmental Revenue. Intergovernmental revenue is about 9 to 10 percent of the general fund budget. By far, the most important component of this is the highway users tax, at about 90 percent of the total. The highway users tax is intended to support traffic safety and road maintenance programs. There has been political pressure at the state level to reduce the resources that support the tax, but, so far, this has not happened. However, if one of these efforts were successful the City would find it- self with reduced revenue. City staff believes that the Funding Advancements for Surface Trans- portation and Economic Recovery (FASTER) portion of the highway users tax is the most vulnerable to being eliminated (about $1.5 million), so reserve strategy could focus on replacing that amount for one year (after which point the City would presumably have adapted). The City also receives a number of grants for capital projects, and some for operations. These grants are not accounted for in the general fund, but if the grants were to be lost there could be some pres- sure on the general fund to continue the associated service. For capital projects, the City would likely cancel or defer the project or find another source of funding, rather than using reserve to make up the shortfall from a lost grant. Lost grants for operations may require some support from the general fund in order to provide continuity in service (assuming the City cannot simply discontinue the serv- ice). A reserve of $3 million appears to be adequate to cover this risk, based on the level of grants used to support core operating programs currently. Exhibit 2.5 Five-Year Trends for Use Tax 2011 2010 2009 2008 2007$ Revenue $6,024,785 $6,454,560 $5,668,451 $8,490,105 $9,264,952 Annual Change -6.7% 13.9% -33.2% -8.4% -12.4% 14 Transfers from Other Funds. The City receives about 17 percent of its revenue from transfers from other funds (from City utilities). This transfer is a matter of City Council policy. There do not appear to be any major threats to the continued economic viability of this policy, so any change would have a political genesis. A decision to reduce the transfer should be made in the context of how it will im- pact the budget, so a reserve should not be necessary. INFRASTRUCTURE Healthy infrastructure makes for an economically vital community. However, worn infrastructure poses a potential risk of untimely failure. General fund reserves may be needed to repair or replace an asset that fails unexpectedly. In Colorado Springs, the two asset classes that were deemed to be of the greatest importance are bridges and storm sewers. Exhibit 2.6 shows a risk profile for bridges and culverts. Risk is defined as the product of probability of failure and the consequences of failure. Probability of failure is based on the bridge sufficiency index (BSI) provided by the City staff. A lower BSI indicates a bridge that is in worse condition and ultimately a higher risk (probability) to fail. Consequence is based on cost – the higher the replace- ment cost of an asset, the higher the consequence to the City if that asset were to fail.20 As can be seen in the exhibit, 13 bridge structures have been identified as having a high risk rating (those bridges in the red area, which have a total score of between 8 and 10, when the scores from each axis are added together). These bridges have an estimated replacement value of $22,752,672. This aver- ages to about $1.75 million per bridge. A reserve that covers one or two bridges should be adequate, Exhibit 2.6 Risk Profile for Bridges and Culverts Grant Policy The City auditors have pointed out that overreliance on grants is a potential risk for the City. A policy that limits the City’s exposure to the risky elements of grants could be helpful. Section 4 of this report describes how grant policies might be helpful. 15 but using the “Triple-A” rule (described earlier) of doubling our expectation for uncertainty, prepar- ing for the premature failure of three of these bridges might be more prudent. This equates to a $5.25 million reserve. In addition to the bridges and culverts, the City manages 406 miles of storm lines. However, neither install dates nor condition assessments were available for any storm lines. The estimated replace- ment cost for all storm sewers is $588,052,836.21 Since the information necessary to assess risk of fail- ure is not available, the best that can be done is to make an assumption. We do know that about 10 percent of the total dollar value of the City’s bridge inventory is in the higher risk category, so it may be reasonable to start with that number for storm sewers, which would translate to $58 million. We also know that about 20 percent high risk category of bridges was recommended as a reserve amount, which would equate to $11.6 million. We will review how this analysis for bridges and storm sewers fits into an overall reserve strategy in Section 4 of this report. VULNERABILITY TO EXTREME EVENTS AND PUBLIC SAFETY CONCERNS This factor concerns the extreme events (e.g., natural disasters) the City is vulnerable to, the public safety programs that must be funded during the occurrence of an extreme event, and the federal or state programs that would help and how long it would take to get assistance. For example, reim- bursement from the Federal Emergency Management Agency (FEMA) does not always occur right away, so it is important to have reserves to absorb the cost in the meantime, and FEMA does not nec- essarily reimburse 100 percent of the cost of responding to an event. Discussions with the City’s Emergency Operations Manager reveal that Colorado Springs is most at risk for wildfires and floods. Wildfires are probably the most important risk, as the fires of 2012 un- derlined. About 20-25 percent of homes in Colorado Springs are subject to wildfire risk, although fires that damage homes are not that common. The most recent fire was the most destructive in Col- orado history. It impacted around 12,000 acres and burned 347 homes. By comparison, the most re- cent other fires of an extreme size were in 2005 and 2000 and impacted 35 and 800 acres, respectively. No homes were burned in either of those fires – in fact, one must look back to around 1950 to find the last time before 2012 that homes in the City of Colorado Springs were burned by wildfire. Large wild fires can be expensive to respond to, requiring police and fire personnel for suppression of the fire and evacuation of people. Many other city departments are involved in the recovery efforts. FEMA reimbursement is not immediate and does not typically cover all the City’s costs of respond- ing. Further, a fire is likely to interrupt the City’s sales tax revenue. Currently, the City only has estimated costs for the most recent fire, which is $3.75 million in person- nel time, mutual aid costs, and other direct expenses. The estimate pertains to the actual firefighting within the City limits and the emergency protective measures taken (e.g., evacuation, security, acti- vation of the emergency operations center, etc.). Of this, the expenses eligible for a 75 percent FEMA reimbursement are estimated to be $2.15 million. Adding together the FEMA ineligible expenses, plus the 25 percent unreimbursed expenses results in a figure of $2.14 million. At least some of this represents expenses that the City would have incurred anyhow (e.g., firefighters on duty). The City government did not incur any significant direct property damage as a result of the fire (probably around $30,000), but there may be some indirect damage to storm sewers later on, as a result of in- creased run-off, from the fire-damaged areas. The City engages in mitigation efforts, such as defor- estation of areas that are at risk for wildfire, but it is still important for the City to retain a reserve to be prepared for future wildfires. 16 Floods are also a concern because they damage infrastructure, require a City emergency response, and require debris removal afterwards. The most severe floods were in 1935 and 1965. Otherwise, smaller floods occur about 6 or 7 times in a 10-year period. The last flood that qualified as a FEMA disaster occurred in 1999, though it wasn’t on the scale of the 1965 or 1935 floods. The cost to the City to address the flood damage of 1999 was $2,670,158. The federal share of the project was 75 percent, or $2,002,619; the state share was 12.5 percent, or $333,770; and the City share was the remaining 12.5 percent, or $333,770. This would equate to about $3.67 million in total costs and $460,000 for the City’s final share in today’s dollars. Blizzards represent a final, less severe risk. The magnitude of impact is not as great as for fires or floods, but the City still incurs an unexpected cost. The last significant cost was in 2007, when the City needed to appropriate an additional $400,000 to deal with snow storms. In summary, Colorado Springs faces a risk from several types of extreme events that have the poten- tial to cause loss of life and property and to disrupt business. The City has taken steps to protect the health, safety, and welfare of the community in light of these risks. Fortunately, however, these ex- treme events do not appear to constitute a large risk to the City’s financial position. For example, a reserve of $4 million (compared to annual City revenues of about $220 million) would be more than adequate to cover the cost of either the most recent fire or a flood of similar severity to the 1999 flood, before FEMA reimbursement. However, using Makridakis’s “Triple-A” approach (described earlier), it may behoove the City to aug- ment the level of risk it is preparing for. We have a very limited number of data points to inform us, so a higher multiplier seems appropriate. If we multiplied $3.75 million by 2 we would get $7.5 mil- lion. However, much of an extreme event’s cost would be reimbursed by other parties (e.g., a 75 per- cent reimbursement from FEMA) and some of this figure would represent costs the City would incur anyhow (e.g., regular salaries for public safety personnel), so a $7.5 million reserve might be exces- sive. Discussions with City staff indicated that the City would have incurred about one third of the most recent fire’s costs in the normal cost of doing business, and that about half of the reimburse- ment from FEMA can be expected to be received within six months of the expenditure. Using this as a reference point, a reserve of $3.3 million might represent the minimum prudent reserve amount because it accounts for the fact that the City will have to bear some of the costs of responding to an extreme event in its regular budget, and that another significant portion of the cost will be reim- bursed quickly by FEMA. A reserve of $5 million might be a middle ground because it does not ac- count for FEMA reimbursement (which is outside the control of the City). Section 3 will consider the all the foregoing analyses together in order to present a final recom- mended reserve target for the City. 17 3. Secondary Risk Factor Analysis This section presents an overview of risk factors that are less complex or of lower magnitude than the primary risk factors, but that also have implications for the City’s general fund reserve strategy. LEVERAGE A highly leveraged organization has less flexibility. Examples of leverage include long-term debt, pension obligations, and obligations for post-employment health care. Reserves are a critical source of financial flexibility, so high leverage may call for higher reserves. This section will address each of the aforementioned sources of leverage. Debt The City has very little debt. Exhibit 3.1 demonstrates this by comparing the City’s level of indebted- ness to other cities. Exhibit 3.1 includes a group of cities that Colorado Springs has identified as “Best in Class” for the purpose of comparing the City’s business practices to those of other, similar cities. Exhibit 3.1 also includes two “sales tax comparable” cities – Colorado cities that receive a large por- tion of their revenue from sales taxes, but are not otherwise as similar to Colorado Springs. Finally, the exhibit provides summary statistics of all these municipalities. Exhibit 3.1 compares debt along Exhibit 3.1 Comparison of Colorado Springs’ Indebtedness with Other Cities “Best in Class Cities” Colorado Fort Collins Oklahoma Denver Indianapolis Charlotte Springs City Population 422,816 144,875 580,000 619,968 820,445 731,424 Debt per Capita 256 342 1,072 2,702 1,445 1,829 Debt Service as a % of Expenditures 5.9% 3.5% 10.2% 10% 13.8% 15.2% Sales Tax Comparables Summary Statistics Colorado Lone Tree Centennial Average Median Springs Population 422,816 11.097 100,377 553,255 599,984 Debt per Capita 256 2,558 28 1,274 1,258 Debt Service as a % of Expenditures 5.9% 10.4% 0.3% 9.8% 10.1% The City has substantially lower debt levels than the average of the comparison group. 18 two commonly used measures of indebtedness. The first, debt per capita, measures the burden placed on citizens by municipal indebtedness. The second measure is debt service (principal and in- terest payments) as a percent of city expenditures. This figure measures the pressure placed on the budget by debt payments. Colorado Springs is well below the average on both of these measures. This means that Colorado Springs should not find its financial flexibility reduced by excess debt. In fact, the City’s debt capacity could offer an alternative source of financial flexibility. For example, if the City were found liable for an exceedingly large judgment that was due immediately, it might be able to use debt instruments to pay the amount over time. The reader should note that the GFOA did not use only the general fund financial information to cal- culate these ratios, but rather used the broader categories of “governmental activities” and “govern- mental funds,” which can be found in any comprehensive annual financial report. This is because all the cities accounted for debt in different funds, so looking at just the general fund would provide a partial, and inaccurate, impression. However, the aforementioned categories have fairly standard meanings across government and they include most of the general government services one would typically associate with a municipality, such as public safety and public works. Therefore, they ad- dress debt of a general nature, which does have direct relevance to the financial flexibility of the gen- eral fund. These general government categories, though, exclude utilities and other more business-like activi- ties. The business-like category of services was excluded for two main reasons. First, municipalities do not provide these types of services as consistently as they do general government services. Second, these services, particularly utilities, often carry large amounts of debt, and would therefore have had a major impact on the indebtedness measures. However, this debt has a much more indirect rela- tionship to the financial flexibility of the general fund. Pensions The City is involved in four different self-funded pension arrangements, all of which are closed to new participants. • The Old Hire Police Pension Fund has been closed and has 166 total members. The plan is 81 percent funded as of January 1, 2012. GFOA Best Practices call for 100 percent funding of pen- sion liabilities.22 The plan has an unfunded liability of $16.1 million, which translates into an annual actuarial required contribution (ARC) of $1.5 million for 2013, up from $1.4 million in 2012. • The New Hire Pension Plan – Police Component has 650 members and a funded ratio of 80.2 percent. The plan has an unfunded liability of $48.8 million, which translates into an annual ARC of $10.6 million for 2013, up from $9.6 million in 2012. • The Old Hire Fire Pension Fund has 193 members and is 84.1 percent funded. The plan has an unfunded liability of $15.5 million, which translates into an annual ARC of $1.5 million for 2013, which is about the same as 2012. • The New Hire Pension Plan – Fire Component has 286 members and is 79.2 percent funded. The plan has an unfunded liability of $25.9 million, which translates into an annual ARC of $4.7 million for 2013, which is down from $ 5.2 million in 2012. The City also participates in two statewide plans. The Colorado Public Employees Retirement Associ- ation for is for civilian employees. As of December 31, 2011, the PERA Local Government Division’s funded ratio was 69.3 percent, with an unfunded liability of $1.277 billion. Of course, this underfund- ing could have some impact on the City in the form of increased contribution rates in the future. The Fire and Police Pension Association of Colorado provides a defined benefit plan for sworn officers. It is funded at over 100 percent as of January 1, 2011. 19 Another issue common to all pension funds is the assumed rate of return on pension fund assets. Pension funds often assume return rates of around 7 to 8 percent annually. The recent performance of investment markets has led some to question the return assumptions the Colorado Public Em- ployees Retirement Association uses. If circumstances were to require the association to lower its re- turn assumptions, then member governments would have to increase contributions to make up the difference.23 Assuming that the City keeps up with its ARC payments, the unfunded accrued liabilities should, in theory,24 be covered by the end of the amortization period (which can vary with the plan, but typi- cally is between 20 and 30 years). Keeping up with the ARC payments is a matter of City budgetary policy, and not really an issue that should be addressed through using reserves. However, given the uncertainty around pension issues, it is difficult to say when increases would occur or how much they might be. Accordingly, it would be prudent to hold some reserve to help make a more gradual adjustment to any potential large increases in contribution rates. The City currently pays about $10.5 million in annual contributions to the Colorado Public Employees Retirement Association and about $14.5 million to the other pensions, for total of about $25 million. A reserve of $6.25 million would cover a 25 percent increase in pension costs. Of course, an increase in the City’s contribution would be felt over many years, but the reserve will allow the City to make a gradual adjustment or to more easily absorb a larger increase in contributions in one year. The City has considered different actions to mitigate its pension liabilities, including increasing the contributions required from employees and switching to a defined contribution pension plan. It has also shifted away from a single-employer plan to the state plan for the most newly hired sworn offi- cers, which should be less volatile and help mitigate risk. Other Post-Employment Benefits (OPEB) The City allows retired sworn police officers to stay on a City-sponsored medical plan. The cost of this benefit is paid for by the City as it is incurred. The City’s annual required contribution for OPEB is $2.2 million and there is a net obligation of $11.2 million. The City has taken steps to contain its OPEB liability, such as eliminating the City-provided subsidy for retiree health care for new hires and going to a flat (instead of variable) subsidy for existing employees. Hence, similar to pensions, the City will likely not experience near-term, large expenditure spikes or a drastic decrease in the City’s financial flexibility owing to OPEB liabilities. Also, like pensions, the financial pressure created by OPEB liabilities is best addressed through the budget process, not general fund reserves. EXPENDITURE VOLATILITY This risk factor refers to potential spikes in expenditure, usually arising from a special, non-recurring circumstance. Expenditures of a recurring nature should not be addressed through the use of re- serves, since reserves do not represent a sustainable source of funding for recurring expenditures. Rather, recurring expenditures should be accommodated in the operating budget. In Colorado Springs, lawsuits appear to be the most important potential source of expenditure spikes, especially because the City’s risk management funds do not carry a large amount of reserves themselves, requiring the general fund to backstop them. Discussions with the City’s attorney and risk management professional reveal the following: • The City faces a number of litigation cases each year. The average potential liability tends to be pretty consistent from year to year. The City normally budgets between $600,000 and $800,000 each year for claims, which generally has proven sufficient. In more recent years, the number of litigation cases has risen somewhat, but this does not appear to be a significant trend. 20 • The City is a facing a couple of extraordinary special cases. Due to the sensitivity of the cases, they will not be discussed in detail in this report, but there is a significant degree of uncer- tainty around the amount the City could be liable for and if the City will be liable for anything at all. Hypothetically, the liability could represent tens of millions of dollars, but the City At- torney believes that an amount of between $2 million and $4 million is a more realistic esti- mate of the City’s potential risk. Also, under certain circumstances the City could negotiate a multi-year payment schedule for a large liability. • In the State of Colorado, certain forms of cancer have been designated as work-related injuries for firefighters. Hence, the City’s worker’s compensation fund will face an increased liability, which will, in part, be covered by the general fund (since the general fund is one of the con- tributing funds to the worker’s compensation fund). This would not create an expenditure spike, but rather would manifest as an increased annual contribution (probably not to exceed $1 million to $2 million per year). Accordingly, this change to the City’ recurring expenditure structure should be handled through the City’s budget process. In conclusion, it would seem prudent for the City to account for at least some of the risk associated with the extraordinary lawsuits in its reserves. The final section of this report will address how this risk fits in with the City’s total reserve goals. GROWTH OF THE COMMUNITY Rapid growth of the community could call for larger levels of reserves, lest service requirements ex- pand beyond the City’s ability to continue services in the face of revenue interruption. For instance, property tax revenues may not be received until a couple of years after development occurs, yet the government will still need to provide for the public safety, health, and welfare of these members of the community in the meantime. Colorado Springs is a moderate growth community in a higher growth region. The City averages 1.5 percent growth in a region that grows 2 percent annually. The City does not rely heavily on property taxes, so is not heavily impacted by a lag between when serv- ices are required by a new development and when revenues are received. Also, the City requires de- velopers to build much of the infrastructure associated with development (roads, parks, etc.), so it does not have to cover that expense. In conclusion, the fact that Colorado Springs is only expecting moderate growth in the next few years and that its development financing approach does not require City resources for large capital outlays means that the implications of growth for the City’s reserves are minimal. LIQUIDITY A larger amount of unreserved fund balance may be needed to avoid cash flow problems if the aver- age maturity of receivables significantly exceeds the average maturity of payables. A common exam- ple of this can be found in governments that are heavily reliant on property taxes. The bulk of taxes may only be received at one or two times during the year, requiring reserves to bridge the months with lower receipts. As stated, Colorado Springs is not very reliant on property taxes at all. In fact, its revenue tends to come in fairly evenly over the year. Exhibit 3.2 (on the following page) shows the projected monthly balances for 2012. As the chart shows, the City’s ending balance actually moves steady upwards for almost the entire year, eventually dropping near the end (due to bond repay- ments), but still ending up higher than it started. Hence, the City does not appear to have a liquidity problem that requires reserves to cover the gap. 21 The City’s ending balances rise steadily throughout most of the year. Exhibit 3.2 The City’s Projected Monthly Ending Balances for 2012 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 Ja n - 1 2 Fe b - 1 2 Ma r - 1 2 Ap r - 1 2 Ma y - 1 2 Ju n - 1 2 Ju l - 1 2 Au g - 1 2 Se p - 1 2 Oc t - 1 2 No v - 1 2 De c - 1 2 22 4. Recommendations This section provides GFOA’s recommendations to Colorado Springs, based on the analysis pre- sented in this paper. The first sub-section addresses the primary purpose of this report: to recom- mend a reserve target for Colorado Springs. The second sub-section provides other ideas related to reserve management strategy that Colorado Springs might find helpful, based on GFOA’s experience with best practices in public finance. RECOMMENDED RESERVE TARGET FOR COLORADO SPRINGS This section establishes the recommended reserve target for Colorado Springs. As a first step, the re- port will review the essential findings of the analysis for each risk factor. Next, the report will provide some helpful comparative information, such as the reserve levels maintained by other cities as well as rating agency standards. Finally, all of this information will be synthesized to reach a reserve tar- get. Comparative Reserve Information When considering a reserve target it is helpful to consult outside standards. Two widely cited stan- dards are GFOA’s Best Practices and rating agency guidelines. The GFOA Best Practice recommends, at a minimum, that general-purpose governments, regardless of size, maintain unrestricted fund balance in their general fund of no less than two months (16 percent) of regular general fund operat- ing revenues or regular general fund operating expenditures.25 Standard & Poor’s considers reserves of between 1 percent and 4 percent of revenues to be “adequate,” while reserves above 15 percent are “very strong.”26 It is also useful to consider the experiences of other governments. Exhibit 4.1 compares Colorado Springs’ unrestricted fund balances as a percent of general fund revenues to the same cities that ap- peared in the debt comparison (Exhibit 3.1). “Unrestricted fund balance” is usually used to describe the portion of fund balance that is available to serve as a reserve for the types of risk mitigation pur- poses that were described in this report (i.e., respond to extreme events, protect against revenue downturns, etc.). This is because unrestricted fund balance is the portion of fund balance that does not have restrictions placed on its use by outside authorities. 23 As Exhibit 4.1 shows, the typical unrestricted fund balance falls somewhere in between 20 percent and 25 percent of general fund revenues. Most of the cities in the analysis were closer to 20 percent, but two outliers (Indianapolis and Centennial) pulled up the average. The average level of unrestricted fund balance (i.e., reserves) falls between 20 percent and 25 percent for the comparable group. Colorado Springs falls within this range right now. The outliers in the comparable group (Indianapolis and Centennial) have special circumstances. Indianapolis had a very large amount of “committed” fund balance, which is a subcategory of “unre- stricted” fund balance. “Committed” fund balance is considered to be the most constrained of three subcategories of unrestricted fund balance because the City’s management has committed those re- serves for a very specific purpose (the other two subcategories are “assigned” and “unassigned”). While it is impossible to say from Indianapolis’s public reports, it could be that this unusually large amount has been accumulated to pay for a special project of some kind or is otherwise not intended as a hedge against risk. In fact, if this amount is removed, Indianapolis’s reserve drops to 22 percent – much more consistent with the other cities. None of the other cities had nearly as large an amount, by any measure, of committed reserves. For example, 61 percent of Indianapolis’s reserves are com- mitted, while Colorado Springs only has about 3 percent in this category and Denver has about 8 per- cent, making Denver’s fund balances the most highly committed after Indianapolis. As for Centennial, about 75 percent of Centennial’s reserves are in the “unassigned” subcategory (the least constrained of the three), which suggests that Centennial has simply accumulated a much higher relative level of reserves than the other governments in Exhibit 4.1. Interestingly, Centennial also has, by far, the lowest debt burden of any of the cities (see Exhibit 3.1). This high reserve, cou- pled with an extremely low debt burden suggests that Centennial has a significantly different eco- nomic base than the other cities. For example, the median household income in Centennial is $85,500, compared to $51,000 in Colorado Springs and $55,400 in the State of Colorado. The median home value in Centennial is $260,000, compared to $182,000 in Colorado Springs and $205,000 in the State of Colorado.27 In 2010, the unemployment rate in Centennial was 4.8 percent, compared to 9.4 percent in Colorado Springs. Although neither municipality relies very heavily on property taxes, it is interesting to note that the total assessed value of properties in Centennial is 34 percent greater on a per person basis than in Colorado Springs. Finally, Centennial’s general fund revenues are, on a per capita basis, 20 percent greater than those of Colorado Springs, even though Centennial appears to Exhibit 4.1 Unrestricted Fund Balance Comparison “Best in Class Cities” Colorado Fort Collins Oklahoma Denver Indianapolis Charlotte Springs City Unrestricted Fund Balance as a % of Revenues 22.6% 23.1% 12.7% 18.3% 56.9% 17.3% Sales Tax Comparables Summary Statistics Colorado Lone Tree Centennial Average Median Springs Unrestricted Fund Balance as a% of Revenues 22.6% 29.6% 52.9% 25.2% 20.5% The average level of unrestricted fund balance (i.e., reserves) falls between 20 percent and 25 percent for the comparable group. Colorado Springs falls within this range right now. The outliers in the comparable group (Indianapolis and Centennial) have special circumstances. 24 provide a more limited set of services to its citizens (for example, Centennial is served by a separate fire protection district and recreation district, while Colorado Springs provides these service di- rectly). These distinctive characteristics have likely made it more practical for Centennial to accumu- late a sizable reserve. Putting it All Together: The Reserve Recommendation In order to reach the final recommendation for a reserve target for Colorado Springs, let’s first review the individual analysis results from each of the risk factors. Primary Risk Factor – Revenue (Sales Tax) Volatility. While the sales tax does show some volatility, this is due almost entirely to economic cycles and seasonal effects (as opposed to random variation). Therefore, the most important vulnerability the City has with respect to sales taxes is an economic downturn. A review of past economic downturns leads us to believe that the City should prepare for a potential 20 percent decline in sales tax revenues over 25 months as a plausible “worst case sce- nario” (this amounts to about $23 million in reduced revenue). However, the City would presumably reduce its spending in the event of such a severe downturn, such that a reserve to cover the entire amount of the revenue decline would not be necessary. The City budget office estimates that the budget could be reduced by just under $10 million without creating a major disruption to services (though service quality would be negatively affected to some degree, of course). This means the City should maintain a reserve of at least $13 million to fill the remaining portion of the revenue gap and to help the City make a “soft landing” in the case of a major revenue decline. The City’s other revenue sources are fairly stable as a group, but as a prudent measure the GFOA has recommended establishing some reserves to account for volatility. These reserves added up to $7.3 million. Primary Risk Factor – Infrastructure. General fund reserves may be needed to repair or replace an asset that fails unexpectedly. In Colorado Springs, the two asset classes that were deemed to be of the greatest importance are bridges and storm sewers. Thirteen bridge structures have been identified as having a high risk rating. These bridges have an estimated replacement value of $22,752,672, an average of about $1.75 million per bridge. A reserve that covers one or two bridges should be adequate; it might be more prudent, however, to use the “Triple-A” rule of doubling our expectation for uncertainty and prepare for the premature failure of three of these bridges. This equates to a $5.25 million reserve. The City manages 406 miles of storm lines. Installation dates and condition assessments were un- available for any storm lines. The estimated replacement cost for all storm sewers is $588,052,836.28 Since the information necessary to assess risk of failure is not available, the best that can be done is to make an assumption. We do know that about 10 percent of the total dollar value of the City’s bridge inventory is in the higher risk category, so it may be reasonable to start with that number for storm sewers, which would translate to $58 million. We also know that about 20 percent high risk category of bridges was recommended as a reserve amount, which would equate to $11.6 million. Primary Risk Factor – Vulnerability to Extreme Events. Although the City is subject to extreme events that pose a significant threat to life and property, historical experience has demonstrated that the fi- nancial impacts of these events have been manageable. For example, the most recent fire was the worst in Colorado history, but the total cost to the City was only $3.75 million (the City’s annual budget is about $220 million). Taking into account the uncertainty associated with the scale of future extreme events as well, as well as the timing of FEMA reimbursement and the portion of event re- sponse costs that are likely going to be already covered by existing budgeted resources a reserve for extreme events of $5 million seems reasonable, but an argument for a reserve of up to $7.5 million could also be made. 25 Secondary Risk Factor – Leverage. The City has very little debt, so the City’s reserve strategy does not need to account for reduced financial flexibility from debt. The City has some financial pressure from pension obligations. It participates in a number of plans, none of which is 100 percent funded. The Colorado Public Employees Retirement Association is a particular concern for City officials because it has a low funding ratio and its assumptions around the return on plan assets have been publicly questioned for being too high. Both of these factors mean that the Association may require significantly increased contributions from its member govern- ments. Assuming that the City keeps up with its annual pension payments, the unfunded accrued liabilities should, in theory, be covered by the end of the amortization period (which can vary with the plan, but typically is between 20 and 30 years). Keeping up with the ARC payments is a matter of City budgetary policy, and not really an issue that should be addressed through using reserves. However, given the uncertainty around pension issues, it is difficult to say when increases would occur or how much they might be. Accordingly, it would be prudent to hold some reserve to help make a more gradual adjustment to any potential large increases in contribution rates. The City currently pays about $10.5 million in annual contributions to the Colorado Public Employees Retirement Associa- tion and about $14.5 million to the other pensions, for total of about $25 million. A reserve of $6.25 million would cover a 25 percent increase in pension costs. Of course, an increase in the City’s contri- bution will be felt over many years, but the reserve will allow the City to make a gradual adjustment or to more easily absorb a larger increase in contributions in one year. Secondary Risk Factor – Expenditure Volatility. The City is facing a few large lawsuits that could entail significant settlement costs if judgment goes against the City. The City attorney believes that $2 mil- lion to $4 million is a reasonable range to prepare for. Secondary Risk Factor – Liquidity/Cash Flow. The City faces no important liquidity or cash flow prob- lems that create a shortage of working capital. Secondary Risk Factor – Growth of the Community. The fact that Colorado Springs is only expecting moderate growth in the next few years and that its development financing approach does not require City resources for large capital outlays means that the implications of growth for the City’s reserves are minimal. In summary, the components of a recommended reserve are: • $13 million for sales tax economic uncertainty • $7.5 million for economic uncertainty in other revenues • $6.25 million for pension payment uncertainty • $5.25 million for critical bridge failure and $11.6 million critical storm sewer replacement, for a total of $16.85 million • $5 million to $7.5 million for extreme events • $2 million to $4 million for expenditure spikes from law suits Many cities express their reserve policy target as single number (e.g., 16 percent of revenues). How- ever, the GFOA has found that leading municipalities often find it helpful to segment their reserves into different categories because this makes the purpose of the reserve more transparent. For exam- ple, a reserve for “emergencies” and a reserve for “economic uncertainty” would provide more clarity on the purpose of the reserves than one all-encompassing reserve. The first three bullets above could comprise the budgetary uncertainty reserve, while the last three would form the emergency reserve, 26 leading to the following targets (which have been rounded to the nearest whole numbers for ease of use in policymaking):29 Budgetary Uncertainty Reserve $13 million for sales tax economic uncertainty + $7.5 million for economic uncertainty in other revenues + $6.25 million for pension payment uncertainty = $27 million or about 12.5% of general fund revenues30 as budgetary uncertainty reserve Emergency Reserve $5.25 million for critical bridge failure and $11.6 million critical storm sewer replacement, for a total of $16.85 million + $5-7.5 million for extreme events + $2-4 million for expenditure spikes from lawsuits = $27 million or about 12.5% of general fund revenues as an emergency reserve This provides a target of about 25 percent of general fund revenues, which is also in line with the range of reserves maintained by cities comparable to Colorado Springs and is above what the GFOA considers to be the minimum baseline level that a government should maintain (16 percent).31 These reserves would be considered part of the “unrestricted” portion of the City’s fund balance.32 OTHER IDEAS TO SUPPORT THE GENERAL FUND RESERVE STRATEGY This section presents other ideas that Colorado Springs may wish to consider, relative to its reserve strategy. These ideas include: enhanced sales tax monitoring, a user fee cost recovery policy, a volatile revenue policy, a short-term borrowing policy, and a grants policy. Sales Tax Monitoring Because a potential decline in sales tax revenue is the major driver for the City’s need to retain re- serves, it might consider additional methods to monitor the potential direction of its sales tax rev- enue. The City already employs some fairly sophisticated long-range forecasting methods. It should continue to refine these practices, and continue looking for leading indicators of sales tax perform- ance. However, the GFOA did not conduct an in-depth examination of the City’s long-range forecast- ing methods, so this report will focus on how some of the techniques presented in this paper might be helpful going forward. First, the City might monitor a 12-month, centered moving average, updating it each month. As Ex- hibit 2.3 demonstrated, the 12-month moving average reveals long-term trends that are not as readily apparent from monthly data, especially when month-to-month fluctuations are so dramatic (even if the fluctuations are rather predictable). If the moving average starts to turn down, it could indicate a real trend. Of course, the problem with this approach is that a moving average will always be five to six months behind, since the analysis must wait for the historical data to become available. A more immediately useful technique would be to compare monthly fluctuations to the average. If a month that is normally a high-yield month does not come in as strong as expected or if a month with nor- mally low yield is particularly bad, it could portend trouble. Exhibit 4.2 (on the following page) shows how the months of the year compare to both the 12-month moving average and to the month before it (e.g., how January compared to December, etc.). The month-to-month numbers are often larger because revenues sometimes go from peak to valley and vice versa very quickly. The month-to- month numbers will also be easier to use, because they don’t rely on the availability of moving aver- age data. 27 User Fee Cost Recovery Policy User fees represent about 6 percent of all general fund revenue. User fees are an increasingly popular way to fund municipal services because they assign the cost of the service directly to the customer, as opposed to the general taxpayer. The City could strengthen its user fee base by adopting an official policy on the extent to which it will seek to recover the costs of providing services through a user fee. A user fee cost recovery policy could be very detailed – setting precise targets for the percent of cost to recover for different types of services.33 However, most governments take an approach that allows for more discretion, where the policy establishes full recovery as the goal for user fees, but recognizes that there will be occasional exceptions. This policy from Minneapolis, Minnesota, illustrates: The city shall establish user charges and fees at a level that reflects the service costs… Full cost charges shall be imposed unless it is determined that policy, legal, or market factors require lower fees. This policy approach will require that it be decided, on a case-by-case basis, where subsidization of a service with general tax dollars is appropriate. User fees can be a complex and, sometimes, controversial revenue source. It may be helpful to estab- lish a policy that describes the fundamental goals of user fees and a mechanism for regular fee re- view. The GFOA has made available considerable detailed information on fee policies.34 Volatile Revenue Policy As we have seen, the sales tax can be strongly influenced by the state of the economy. Just as an eco- nomic downturn can depress sales taxes, a buoyant economy can lead to a rapid increase. This pres- ents a financial risk if these new revenues are used to fund recurring expenditures (e.g., new on-going programs and their associated personnel) and if these new revenues stem from an unsus- tainable level of consumer spending. A volatile revenue policy encourages a government to examine its past revenue trends to determine when it may next experience an anomalously high level of rev- enue income, and then to apply this revenue toward non-recurring uses, such as paying off debt, building up a reserve, or special projects that will reduce future operating costs. Exhibit 4.2 Average Monthly Variations in Sales Tax Revenue Average % Difference Average % of the from Previous Month 12-Month Moving Average January 35.7% 125.0% February -33.8% 82.5% March 3.1% 84.4% April 22.1% 103.1% May -10.9% 91.4% June 7.8% 98.5% July 15.2% 113.0% August -8.2% 102.5% September -0.3% 102.2% October 5.6% 107.4% November -8.0% 95.4% December -4.5% 92.4% 28 The policy for the City and County of Denver, Colorado, illustrates this type of policy: It is not prudent to allocate sales tax revenue that exceeds the normal growth rate (defined as the aver‐ age annual growth rate over the last ten years) to ongoing programs. Therefore, sales tax revenues that exceed the normal growth rate should be used for one‐time expenditures or to increase reserves for the inevitable economic downturns. Short-term Borrowing Policy As Exhibit 3.1 showed, the City has a very low level of debt. Debt can be a source of financial flexibil- ity, thereby mitigating the need to hold reserves. Short-term debt could be useful if the City finds it- self with the need for a temporary cash infusion (to deal with an unexpected situation). However, short-term borrowing from external sources is usually considered undesirable due to, among other things, the administrative costs of arranging the deal. Accordingly, a policy usually places limits on short-term external borrowing. For example, a policy might specify that short-term instruments be used only if the transaction costs plus interest of the short-term debt are less than the cost of inter- nal financing and if available cash is insufficient to meet working capital requirements. A policy could also state that short-term debt issued for operating purposes will be limited to cases where there is reasonable certainty that a known revenue source will be received in the current fiscal year sufficient to repay the debt, or where there is a clear financial emergency. For many governments, interfund borrowing is preferred to external borrowing. For example, the City’s utility may make a loan to the general fund or vice versa. This is another way to increase finan- cial flexibility, beyond that provided by reserves. A policy for interfund loans is useful because, if not carefully managed, the loans can become a cross-fund subsidization, which could lead to one group of taxpayers or ratepayers subsidizing another group. A policy can establish terms and guidelines to help avoid overly burdensome loans. The following are suggested elements for an internal loan pol- icy: Definition of a Loan vs. a Transfer. A policy should differentiate a loan from a transfer since the impli- cations of each are different. Essentially, the difference is that operating transfers move financial re- sources from one fund to another, permanently, while interfund borrowings are usually made for temporary cash flow reasons and are not intended to result in a transfer of financial resources by the end of the fiscal year. Criteria for Making Loans. Just as a private lender would apply criteria to a potential borrower, a policy should describe the general conditions under which an internal loan is permissible. A policy should describe these conditions and designate the appropriate authority responsible for authorizing the loan. Here are some examples of such conditions: • The lending fund has funds available. • The borrowing will not adversely impact the lending fund’s long-term financial condition. • A specific source of repayment has been identified in the borrowing fund. • The loan can be repaid within a specified period of time. • Any legal requirements/restrictions are satisfied. Interest Rates and Terms. A policy should also provide guidelines on terms and interest rates. Typi- cally, interest rates would match prevailing rates, with the exact rate set by the finance office. For long-term loans, a repayment schedule must be set, but the loan should typically be fully amortized, preferably on a level or accelerated repayment schedule. 29 Grants Policy Grants are an attractive form of funding for many local governments because they offer the possibil- ity to reduce reliance on taxes and fees drawn from the community. On the other hand, grants can harm the government’s long-term financial position if they lead to implementation of an ongoing program that later requires support from general tax dollars when the grant expires. Further, many grants require matching funds and overhead costs that might end up diverting funds from higher- priority services. A policy can encourage grant-seeking, but should also recognize the risks of overre- liance on grants and direct the organization to manage those risks. The policy from the City of Long Beach, California, instructs staff to analyze the long-term costs and benefits of a grant before accept- ing it: City staff will seek out, apply for, and effectively administer federal, state, and other grants that ad‐ dress the city’s priorities and policy objectives and provide a positive benefit to the city. Before any grant above $50,000 is pursued, staff shall provide a detailed pro‐forma to the city manager that ad‐ dresses the immediate and long‐term costs and benefits to the city. A pro‐forma must be submitted to the city manager for all grants prior to accepting the grant award. A policy should direct that any grants pursued are consistent with the government’s mission and strategic priorities. Spotsylvania County’s policy states that “before applying for and accepting inter- governmental aid, the county will assess the merits of a particular program as if it were funded with local tax dollars.” After the grant has been accepted, a policy should address the possibility that the grant will end, leaving the government to decide whether to continue the program. Spotsylvania County’s policy reads that “local tax dollars will not be used to make up for losses of intergovernmental aid without first reviewing the program and its merits as a budgetary increment.” Infrastructure Maintenance/Replacement Schedule Rather than reserving funds to guard against the failure of worn assets, the City should develop a plan and schedule to maintain and replace assets, as needed. Exhibit 4.3 (on the following page) shows what yearly capital expenditures would be to keep up with bridge and culvert replacements. Obviously, the pattern is quite volatile. The City might consider translating this into a regular sched- ule, with a set annual contribution to funding that schedule. The GFOA estimates that a $10.9 mil- lion approximate annual contribution would be necessary to fund the schedule. Not only would this reduce the amount the City would have to hold in reserve (since assets would not deteriorate to criti- cal condition), but it would greatly reduce the actual risk the City faces. 30 For storm sewers, the average annual contribution for a regular maintenance/replacement schedule would be about $36 million, though this is a less precise figure because the underlying information on asset condition is not as detailed. Exhibit 4.3: Estimate of Annual Bridge and Culvert Replacement Costs 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2033 2035 2037 2039 2041 2043 2045 2047 2049 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Failure Cost 31 Appendix 1. Sales Tax Revenues in Boulder, Colorado In order to provide a little better comparative context for examining Colorado Springs’ sales tax, the GFOA requested permission from the City of Boulder to use its monthly sales tax data in a similar analysis to Colorado Springs.’ Exhibit A1.1 shows Boulder’s revenues since June 2004. Like Colorado Springs, Boulder has four “spikes” during the year, with a holiday spike being the largest. Boulder’s sales tax revenue is a little more volatile, with about 4 percent of the variation attributable to random factors. Boulder also experienced a protracted decline in its trend-cycle in the wake of the Great Recession – a 10 percent drop over 21 months. This is just under half a percent per month, not too different from Colorado Springs. Exhibit A1 Monthly Sales Tax Revenue from the City of Boulder, Colorado 32 1 The Triple-A approach is adapted from: Spyros Makridakis, Robin Hogarth, and Anil Gaba. Dance with Chance: Making Luck Work for You (Oneworld Publications: Oxford, Eng- land, 2009). 2 Drainage basins, open drainage features, discharge points, and point features are not in- cluded in the replacement cost. Adding these items would likely push it to more than $1 bil- lion. 3 Targets have been rounded to nearest “whole” numbers for ease of use in policymaking. Also, see the main body of the report for a discussion of the independence of the risk factors and the implication for sizing the reserve. 4 Based on the 2012 budget estimate of approximately $220 million in general fund revenue. 5 See the GFOA best practice, Appropriate Level of Unrestricted Fund Balance in the Gen- eral Fund, available at www.gfoa.org. According to this best practice document, governments should establish a formal policy of maintaining reserves equal to about 16 percent of rev- enues or expenditures, and the actual target should be based on an analysis of the salient risks the government faces – which in many cases calls for a reserve level of more than 16 percent. 6 TABOR, for example, limits the City’s ability to increase taxes. 7 GFOA Best Practice, “Appropriate Level of Unrestricted Fund Balance in the General Fund” (2009). 8 Definition of risk taken from Douglas W. Hubbard, The Failure of Risk Management: Why It’s Broken and How to Fix It (Hoboken, New Jersey: John Wiley and Sons, Inc., 2009). 9 The risk factors and basic review method were developed and published in: Shayne C. Kavanagh, Financial Policies (Chicago: Government Finance Officers Association, 2012). 10 The use tax is much smaller than the sales tax – comprising only around 5 percent of the total of the two. 11 This is City general fund only and excludes other sales tax revenues, such as the 2002 public safety sales tax (which is accounted for outside of the general fund, in a special rev- enue fund). 12 The GFOA used a method of data de-seasonalization known as multiplicative decomposi- tion to arrive at this conclusion. 13 The trend-cycle line is calculated by taking a 12-month centered moving average of ac- tual monthly sales tax revenue. For example, the moving average for January 2005 would be Endnotes 33 an average of August 2004 through July 2005. February 2005 would be an average of Septem- ber 2004 through August 2005, and so on. A 12-month moving average smooths out seasonal variation, leaving only the trend-cycle. 14 The term “Black Swan” derives from a belief held in England before 1697 that all swans were white – in fact, the term “Black Swan” was a common metaphor for an impossibility. Black swans were discovered in Australia in 1697, demonstrating the limits of human knowl- edge about the world. 15 See Makridakis, Hogarth, and Gaba, Dance with Chance, 2009. 16 Of course, the long-term impacts of those actions are still unknown. 17 According to the Case-Shiller Housing Index, home prices nationally since 2009 have var- ied in a range consistent with housing values in 2003. As of this writing, values have experi- enced increases for six consecutive months. 18 According to David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones In- dices (which includes the Case-Shiller Housing Index), “the housing market seems to be stabi- lizing, but we are definitely in a wait-and-see mode for the next few months.” 19 Based on sales prices from Zillow.com. 20 Note that further analysis could be conducted with City staff to refine asset replacement costs, as well as reviewing the risk rating to incorporate more factors into the consequence (i.e., traffic count, location, major structure, etc.). 21 Drainage basins, open drainage features, discharge points, and point features are not in- cluded in the replacement cost, which would likely push it over $1 billion. 22 See GFOA Best Practice, “Sustainable Funding Practices of Defined Benefit Pension Plans” (2009), www.gfoa.org. An 80 percent funded ratio is often cited as an acceptable fund- ing benchmark, but this figure does not have a sound actuarial basis. See, for example, Gi- rard Miller, “Pension Puffery,” www.governing.com. Miller does state that an 80 percent funding ratio might be acceptable at the bottom of an investment market because the funded ratio will presumably rise with the market. Conversely, though, the funded ratio should be above 100 percent at the top of a market to protect against a fall. 23 On top of this, the City is leasing its hospital system, so the employees will no longer be contributing to the Colorado Public Employees Retirement Association, which adds further un- certainty to the City’s future pension position. 24 Even if all ARC payments are made, an employer could still end up with an unfunded lia- bility at the end of the amortization period if the actuarial assumptions used to calculate the ARC do not hold up (e.g., the rate of return on plan investments). 25 GFOA Best Practice, “Appropriate Level of Unrestricted Fund Balance in the General Fund” (2009), www.gfoa.org. 26 David G. Hitchcock, Karl Jacob, and James Wiemken, Key General Obligation Ratio Credit Ranges – Analysis vs. Reality (New York: Standard & Poor’s, 2008). 27 Based on values from Zillow.com. 28 Drainage basins, open drainage features, discharge points, and point features are not in- cluded in the replacement cost, which would likely push it over $1 billion. 29 Note that many of the risks listed in the table can be considered “independent,” meaning that the occurrence of one risk has little to do with the potential occurrence of another risk. For example, the occurrence of an extreme event has little or nothing to do with whether the City 34 also experiences an increase in its pension payments. In these cases, there could be a justifi- cation for holding less reserves than the total of the two numbers because it is rather unlikely that the City will experience both of these problems at once. However, other risks are not in- dependent. For example, an economic downturn that causes a reduction in sales tax revenue would likely also impact other revenues, a natural disaster could make the City more likely to experience a critical infrastructure failure, or a natural disaster could result in interruption to sales tax revenue. Because the risk factors appear to have at least some level of significant inter-dependency (a level which is difficult to know), the approach of adding the reserve com- ponents together represents a conservative approach to sizing reserves for Colorado Springs. This approach would leave the City without any exposure to risk arising from risk factor de- pendency. Note that zero exposure to risk also means that the City will hold more reserves that it will probably need at any one time. 30 Based on about $220 million general fund revenue, as per 2012 budget estimates. 31 See GFOA Best Practice, “Appropriate Level of Unrestricted Fund Balance in the General Fund” (2009), www.gfoa.org. The Best Practice states that reserves equal to about 16 percent of revenues or expenditures is the minimum a government should consider for its policy and that the actual target that a government adopts should be based on an analysis of the salient risks that a government faces (which in many cases may call for a higher reserve level than 16 percent). 32 Within the “unrestricted” portion of fund balance, the City could choose to locate the re- serves within the “unassigned” or “committed” categories. Municipal governments typically choose the unassigned category because the accounting requirements to place funds in the committed category are more stringent (e.g., the commitment must be made by formal action of the City Council and the language describing the conditions for using the reserves must meet a high level of precision). 33 See for example, the policy of the City of San Luis Obispo, California, which is available on the GFOA website at www.gfoa.org/finanicalpolicies. 34 See Kavanagh, Financial Policies, 2009. BY KEVIN KNUTSON Getting Past the Quick Fix On the ROad tO Financial Resiliency October 2012 | Government Finance Review 33 T he fiscal imbalance between revenues and commit- ments is growing as the impact of falling property values, high unemployment, and weak consumer con- fidence erodes local taxes. In addition, pressure from fed- eral and state budget-reduction strategies also affects local revenues and expenditures. Projected decreases in revenue for 2012 represent the sixth straight year-to-year decline. Many organizations addressed this fundamental shift with strategies designed to address short-term declines, but some of the things agencies normally do to weather typical downturns—deferring maintenance, reducing funding for liabilities, and spending reserves—have made a recovery even more difficult. Deferring maintenance and investments in infrastructure increases future costs while creating a higher risk for potential failure of critical transportation and utility systems. According to the Congressional Budget Office, 75 percent of U.S. infrastructure spending comes from state and local government. And while the dire prediction of massive municipal defaults was over- stated, pledged revenues are failing to cover some revenue bonds and debt service is taking up an increasing percentage of overall expenditures for many local governments. Existing debt loads will remain a major prob- lem in balancing budgets, contributing to the need for fundamental change. Achieving financial sustainability will require organiza- tions to go beyond short-term strategies, to begin rebuild- ing capital programs, funding liabilities, and replenishing reserves. Other external impediments, such as compliance, collective bargaining, and the undercurrent of anti-tax and anti-government sentiment will make it even more difficult to solve these problems. As William Eggers, Robert Campbell, and Joel Bellman have pointed out in “Red Ink Rising: Navigating the Perils of Public Debt,” addressing all these issues simultaneously “will be a challenge to the entire democratic governance model, requiring systemic, structural changes to bend the govern- ment’s cost curve down as well as courage and persistence on the part of political leaders and citizens.”1 FIRST, STABIlITY Many organizations are still struggling to fix budgetary structural imbalances, trying to establish affordable service levels they can fund over the long term. (Tools such as the GFOA’s Fiscal First Aid site, at www.gfoa.org, help by identifying ways of addressing problems and stabilizing finances.) Even so, almost all jurisdictions have made some progress toward financial recovery — recognizing the scope of the problem and taking immediate action, using generic retrenchment strategies. As part of the initial diagnosis, most governments now have a fairly good grasp on their financial positions, liabilities, and debt. This is a good first step, but far from a solution. Unfortunately, many governments have adopted “quick fixes” such as across-the-board operating and wage reductions, deferred maintenance, decreased annual required contribu- tions to pension plans, hiring freezes, elimination of discretionary spending, and use of fund balances to bridge funding gaps. What many have failed to do is to protect reserves and infra- structure, which should be a top prior- ity if the goal is achieving stability. Some of the strategies available must be approached with caution and analyzed carefully before use to ensure that they don’t create unintended consequences. For example, selling off unneeded real estate assets can replenish fund balance reserves and return exempt property to tax rolls, but on the other hand, using the sales proceeds to fund ongo- ing operating expenditures is a short-term solution that can leave a hole in future budgets. Similar approaches include changing investment strategies, offering early retirement or buy-outs, reducing work time, restructuring debt, or closing facilities. Each has a place but needs to be used judiciously and strategically. And what about revenue increases? According to the National League of Cities’ City Fiscal Conditions in 2011 report, 41 percent of city finance officers indicated that their Deferring maintenance and investments in infrastructure increases future costs while creating a higher risk for potential failure of critical transportation and utility systems. 34 Government Finance Review | October 2012 cities had increased fees in recent years. In addition, 23 percent of cities reported new fees, and 20 percent increased their local property tax. These increases might have provided some relief, but they need to be part of an overall cost-recovery strategy and indexed to inflation to be a long-term solution. There are many fiscal first aid treat- ments that should be considered during an initial response, but governments need to develop a long-term view if they are to fully understand the future implications of decisions made today. MOVING TOWARD SUSTAINIBIlITY Taking a long-term view entails a holistic and strategic approach to allocating resources. Organizations often have to implement quick fixes in response to changing conditions, but the most successful ones act quickly on fundamental structural changes so they can adapt to the new realities. The building blocks of long-term financial planning include:2 n Enhancing planning. n Reforming the budget process. n Addressing long-term liabilities. n Increasing accountability. n Becoming more innovative. Planning. One of the first actions to take is to adopt financial policies that promote long-term stability and link financial considerations to operation- al decisions. Policies can help put lim- its in place and encourage desired behaviors by determining reserve goals for funds and limiting the level and types of debt used. Using strategic planning to prioritize goals also allows the organization to align its scarce resources with its intended results. Strategic plans enhance day-to-day decision making in the context of the organization’s overarching goals. They also provide an opportunity for increasing accountability to the community. A good strategic plan can help the organization realign its human capital, allowing it to focus on meeting the key needs of the community, as reflected in the strategic priorities. For example, the City of Coral Springs, Florida, uses its strategic plan to identify activity, resources, and outcomes when mak- ing organizational changes, whether it is adding services and programs or reducing them. Another important planning tool for financial sustainability is a long-range financial forecast, which looks at all revenues and expenditures for at least five years into the future. Anticipating the future impact of cost increases, contracts, revenue trends, service demand, and liabilities gives man- agement the opportunity to address the issues before they become overwhelming. Reform. Organizations need to reform the budget pro- cess, moving from an incremental budget to a policy-based perspective such as zero-based budgeting or priority-based budgeting. Cities as diverse as Boulder, Colorado; San Jose, California; and Blue Ash, Ohio, have used priority-based budgeting to make decisions about which services they will continue to offer and at what level, using community input about priorities and needs — a well-formed process includes stakeholder input. If the jurisdiction has to make Achieving financial sustainability will require organizations to go beyond short-term strategies, to begin rebuilding capital programs, funding liabilities, and replenishing reserves. October 2012 | Government Finance Review 35 cuts, it’s best to include those who will be affected in the decision-making process. It pays to understand citizens’ service priorities even if the organization isn’t ready to implement a full-scale priority- based budgeting effort. In the City of Reno, Nevada, the city council appointed a citizen board to review all city services and rank them according to priority. The resulting report, which was developed using a subjective, multiple criteria scoring matrix, helped city officials target cuts in ways that both protected critical services and helped align the remain- ing resources with constituents’ wants and needs. liabilities. To create an accurate and useful financial forecast and a priority-based budget, jurisdictions must iden- tify all of their long-term liabilities. Once the organization understands the scale of its liabilities, however, it can use those tools to model scenarios for benefit restructuring, in both plan design and cost sharing. This provides an important context for selecting and negotiating benefit changes that are meaningful to employees. An atmosphere of transparency and inclusion help management and labor work together to find solutions. Accountability. Many organizations use performance management systems that keep managers and supervisors constantly apprised of projected results and help reveal opportunities for reducing waste and improving service. Doing so promotes increased accountability as well as provid- ing an “early warning system” for identifying potential issues. To measure well — that is, to create useful measures the organization can use to improve itself — staff needs to have a good grasp on the expected results and on the processes the organization uses to deliver services. Two ways of making this practice explicit in the organization are assigning “owners” to processes and using a team-based approach. Innovation. The key to long-term sustainability is finding a way to make innovation a discipline throughout the organization. Governments across the country have used numerous approaches to process improvement, including Lean Process Improvement and The Malcolm Baldrige National Quality Award model, to include inno- vation in their management systems.3 Recognizing the need for reform, many organizations are trying new ways of providing services, through public-private partnerships, shared services, consolidation, community partnerships (with non-profits and community groups), and volunteer programs. Making use of the resources and assets other organizations offer can be a powerful way to reduce cost and increase flexibility. FROM SUSTAINABIlITY TO RESIlIENCY “Sustainability” suggests that all of the organization’s ser- vices and liabilities have been identified and provided for. The next step, resiliency, protects that sustainability as conditions change. According to the GFOA, “a financially resilient government has recovered its financial stability and gone on to implement strategies, control mecha- nisms, budgeting techniques, and early warning systems to make sure it can withstand future financial shocks.”4 As part of their initial fiscal diagnosis, most governments now have a fairly good grasp on their financial positions, liabilities, and debt. 36 Government Finance Review | October 2012 Resiliency requires leadership, thoughtfulness, vigilance, and the courage to bring up uncomfortable facts. To be resilient is to be prepared. The tools that help make an organization resilient include diversification, redundancy, decentraliza- tion, transparency, collaboration, tolerance for failure, flex- ibility, and foresight. True resiliency balances service levels with available resources; funds reserves, capital, and liabilities; and creates a culture that promotes flexibility and responsiveness. It’s a never-ending cycle of monitoring, analyzing, and adjusting. Most importantly, it means that as the local economic condi- tions improve and you can begin to rebuild, you don’t cre- ate monolithic, inflexible structures. Instead, design plastic, innovative, and nimble organizations that are prepared for whatever comes next. y Notes 1. William D. Eggers, Robert Campbell III, and Joel Bellman, “Red Ink Rising: Navigating the Perils of Public Debt,” Deloitte Review, Issue 8, 2011. 2. For more strategies, see Shayne Kavanagh, “A 12-Step Process to Financial Recovery: A Guide to the GFOA’s New Online Resource,” Government Finance Review, April 2011, and GFOA’s “Recovery from Financial Distress and Fiscal First Aid” website. 3. See Shayne Kavanagh, “Less Time, Lower Cost, and Greater Quality: Making Government Work Better with Lean Process Improvement,” a GFOA whitepaper, for more detail. 4. Shayne Kavanagh, “A 12-Step Process to Financial Recovery. Also see Shayne Kavanagh, “Building a Financially Resilient Government through Long-Term Financial Planning,” a GFOA whitepaper. KEVIN KNUTSON is regional vice president for Management Partners, a local government consulting firm. He is a former budget director and assistant city manager, with 21 years of local govern- ment experience. “Sustainability” suggests that all of the organization’s services and liabilities have been identified and provided for. The next step, resiliency, protects that sustainability as conditions change. Questions? E-mail publications@gfoa.org !" " " "!" " ! " !" " ! !" " !" " " ! " " " " ! " "! ! ! !" " !!" " " " !" !" ! " " " " " " !" "! !" !" " !" " ! " " " " " " ! " ! !"! !" ! !" !" " "! ! "! "" " " !"" " " ! " " " ! " " !" !" !" " " " !" !!" ! " ! " " " " ! "!! !" " ! ! "! !!" ! " " !" " !"! " " !" !! !" " " ! ! " ! What Every Government Should Know About Financial Planning Order online at www.gfoa.org COLORADO INFRASTRUCTURE VULNERABILITY TO CLIMATE CHANGE Floods, wildfires, earthquakes, droughts, extreme events. It is difficult to watch or read the news or enter into a conversation without a natural disaster entering into the discussion. In terms of infrastructure, it often feels like communities are either recovering from the damages incurred from the last event or preparing for the damages that may occur from the next one. Today, these immediate concerns are compounded by the increasing attention being paid to climate change. In Colorado, the recently released Colorado Climate Change Vulnerability Study has brought these concerns to the forefront of the discussion by stating, “Climate change has and will continue to impact the state’s resources in a variety of ways, including more rapid snowmelt, longer and more severe droughts and, longer growing seasons.” 1 The Colorado study is just the most recent in a line of studies that are leading to a common conclusion — it is not a matter of whether our infrastructure will be impacted, but when it will happen and how much can we mitigate the impact. In effect, this is a “pay me now” or “pay me much more later” decision. However, the information and technology resources available to local communities to be proactive in this decision making is increasing rapidly. The technology now exists to determine specific impacts that local infrastructure may experience in various climate 1 Colorado Climate Plan (2015). Edited by the Colorado Water Conservation Board. change scenarios, and the technology exists to make infrastructure more resilient. Similarly, the information is available to support a climate action plan for a community of any size and in any location. The challenge for individuals tasked with setting climate change policy and addressing these near-term and long- term issues is the fact that there are no absolutes concerning what may or may not occur. Decision making in this context requires individuals to accept a level of uncertainty in their decisions and accept that a level of risk will be included in every decision. Although uncertainty is not new to infrastructure planners, climate change represents a new challenge. Specifically, infrastructure design and maintenance decisions need to be made today to address scenarios that may not occur for 20 or 30 years or more. Concurrently, these decisions must be made with an understanding that the costs associated with enhancing long-term resiliency may come at the expense of short-term benefits. While this challenge is based in fiscal realities, it is not the absolute that many portray it to be. Rather, climate change projections should be addressed as an opportunity to analyze the critical infrastructure needs within a community and to leverage available opportunities to enhance resiliency against gradual climate change impacts and extreme events. In this overview of the impact of climate change on infrastructure planning, these opportunities are presented together with the challenges associated with making infrastructure decisions given the uncertainty that exists in respect to future climate scenarios. Based on more than a decade of research and experience in more than 50 countries, the overview provides decision makers with the starting point to move from inaction due to uncertainty to proactive infrastructure policy decisions based on critical analysis. Determining Local Vulnerability Colorado communities have an advantage over many global locations in that critical infrastructure is relatively new. However, Colorado communities face very real threats of floods, wildfires, and tornadoes, among others. Climate change compounds these risks in two ways. First, climate scenarios project increases in the underlying factors that result in the occurrence of extreme weather events. Second, and the issue that receives less attention, climate scenarios project incremental changes that may result in even greater damages to critical infrastructure over the long- term time horizon. The basis for these vulnerability concerns arises from two factors: climate scenario projections and local infrastructure inventories. Climate Scenario Projections Climate scenario projections are commonly the focus of discussion and debate in public fora. The reason for this debate arises from two critical elements of climate science, modeling and The Knowledge Now series features practical research on timely topics from the Colorado Municipal League. KNOWLEDGE NOW 1 Climate Change, October 2015 Paul S. Chinowsky, PhD, University of Colorado professor of civil engineering The Voice of Colorado’s Cities and Towns THE INFORMATION YOU NEED TO SERVE YOUR MUNICIPALITY AND RESIDENTS KNOWLEDGE now downscaling, each of which are associated with conflicting scientific perspectives. In terms of the former, climate models have been developed in labs across the globe. Although people in Colorado are most likely to be familiar with the National Center for Atmospheric Research (NCAR) climate modeling efforts, there are in fact 24 research organizations that produce climate models with projections that are available on the Intergovernmental Panel on Climate Change (IPCC) data distribution site.2 As the recognized international body that sets climate scenario guidelines and compiles climate projection data, the IPCC- recognized models are the set with the broadest level of acceptance. In each of these models, global simulations are created that encompass variables including evaporation rates, ocean temperatures, atmospheric reflectivity, and land-use factors, to name only a few. In all, these models incorporate thousands of equations to simulate natural climate phenomena. As such, variations exist from model to model depend on how each model implements specific simulation equations. These variations expand as the level of detail in the models continues to increase. Whereas previous versions of the models worked at an annual or monthly basis, today’s models work on a daily and, in some cases, hourly basis. Although each model is tested against historic climate patterns to ensure a base level of accuracy in the simulations, the models achieve this accuracy through different approaches. The variations in the underlying model approaches and simulation equations result in differences in climate projections. These differences appear as minor differences in terms of historic and near-term projections. However, as the time frame gets further into the future, more variability is introduced into the simulations as the projections for each day build on each other to produce greater variations between the models. As such, there are models that are criticized for being “wetter,” “dryer,” “colder,” or “hotter” depending on the time frame and geographic location. 2 IPCC Data Distribution Centre. www.ipcc-data.org/index.html. This leads to the argument as to whether some models represent local conditions better than others. It is difficult to make such a determination as all of the model representations are based in truth, and all of the representations are simplifications of what actually occurs in the global climate environment. Further complicating these discussions is the introduction of the representative concentration pathways (RCPs).3 The RCPs are guidelines that anticipate levels of greenhouse gases (GHGs) that will exist in the future. As GHGs are a primary driver in determining future climate conditions, these guidelines significantly influence the outputs of individual climate models. Four RCPs have been established that represent a continuum from minimal GHG mitigation to strict GHG mitigation. The scenarios include a combination and negotiation of global economic, technical, and political perspectives. Each of the climate models is run using the parameters of one or more of the RCPs to produce climate scenario projections. Currently, data for more than 50 climate scenario projections are available on a global basis and we are quickly closing in on 100 scenarios available in local areas. The second factor that leads to uncertainty and variation within these climate projections is the issue of downscaling. Much has been written on this topic and there is significant disagreement in the climate science community concerning the appropriate way to downscale climate projections. The issue revolves around the fact that climate projections are commonly generated at a geographic scale of 2° x 2°. This is roughly equal to an area of 60 miles by 50 miles (300 square miles), although this changes depending on whether it is closer to the equator or the poles. For the application of these projections to local planning efforts, the area of the projection needs to be reduced to increase the focus on a single geographic location. This reduction in area is referred to as downscaling. To achieve downscaling, both statistical and climate modeling- based approaches have been 3 IPCC Data Distribution Centre. sedac.ipcc-data.org/ddc/ar5_scenario_pro- cess/RCPs.html developed and implemented. In both cases, the focus has progressively increased to reduce the geographic grids to 0.5° x 0.5° areas, and more recently, to 0.25° x 0.25° areas. Although these smaller areas are more conducive to predicting effects on local infrastructure, they introduce an additional level of uncertainty to the overall results. Specifically, the methods are further refinements of the representations and estimates of what will occur at a local level. For the purpose of this discussion, it is sufficient to consider these levels of uncertainty as further motivations for analyzing a range of projections for a given area rather than using a single or small group of projections. Local Infrastructure Inventories Given the set of climate scenario projections, vulnerability is determined in a local area by overlaying these projections on top of current and projected infrastructure inventories. In this process, vulnerability of a road or water supply or building is determined by contrasting historic conditions under which the inventory was designed and built with future conditions under which it must operate. In some cases, such as heating and cooling system designs, these comparisons are based on factors such as extreme temperatures and projected humidity levels. In other cases, such as with water supply, these comparisons are based on broad watershed characteristics and projected precipitation trends. In both cases, the vulnerability considerations focus on whether infrastructure designed for historic conditions will perform equally well in future operating environments. The challenge for local communities is understanding that any vulnerability projection is limited by the level of accuracy of the climate projections. At the current time, it is not feasible from an accuracy perspective to determine the differences in vulnerability between A Street and B Street one block apart because of the climate projection resolution. However, the community can obtain an overall vulnerability of its roads based on the projected climate scenarios that are generated for that general location. From this perspective, the combination of climate projections 2 COLORADO MUNICIPAL LEAGUE with localized infrastructure inventories will provide an indication of localized vulnerability. Vulnerability Concerns Although certainty about the future climate is not possible today, projected trends can be analyzed from the data that is available. From the current climate models, the average annual temperature in Colorado is projected to increase by mid-century from 2.5° F to 5.5 F relative to the historic record.4 Concurrently, winter precipitation events are projected to increase in magnitude as well as the frequency of droughts and wildfires. When combined with increasing population trends, these indicators create scenarios of increasing pressure on Colorado infrastructure. The specifics of this increasing pressure and possible sources of budget concerns are as follows: • Roads. Increasing temperatures will weaken paved surfaces which will result in reduced lifespans of the roads as well as increased maintenance costs. Increasing temperatures in mountain communities will result in a greater number of freeze-thaw cycles which will cause increasing levels of damages especially to those roads with higher traffic levels. Increasing magnitudes of precipitation events will exceed the capacity of drainage culverts and result in more frequent washouts of roads. • Buildings. Increasing summer temperatures will lead to greater energy demands to meet cooling loads. Buildings will either need to augment current cooling systems or investments will be needed in advanced energy demand management systems. A greater frequency of flood events will require a determination of whether buildings need greater levels of protection. Finally, if some scenarios are correct and areas of the state get wetter and not drier, then the potential for increased mold and sick building syndrome could become a greater occurrence. 4 Colorado Climate Change Vulnerability Study (2015). Eric Gordon and Dennis Ojima, editors. • Railroads. Although not as well known, railroads are vulnerable to increases in temperature. As temperatures increase, rails can begin to warp and necessitate reduced traffic as well as loads. This phenomenon is already being seen in the eastern and southwestern United States, as well as in western Europe.5 For Colorado, this will lead to reduced freight capacity as well as further slowdowns in passenger rail. • Water and sewers. Many discussions take place around the vulnerability of water systems to a combination of increased demand and reduced supply. However, an equally challenging scenario occurs when increased precipitation events exceed the design capacity of drainage or treatment systems resulting in flooding or contamination of neighboring areas. In areas of Colorado where these events are projected to increase in magnitude and frequency, this scenario is increasing in likelihood. The Response Challenge Colorado is not alone in this vulnerability and now faces a similar challenge as other communities and states across the country. Namely, state and federal regulations are forcing administrative entities to take proactive steps to address potential climate change impacts. In Colorado, the release of the Colorado Climate Plan places direct focus on the need for communities to enhance resiliency in the infrastructure areas of transportation, water, and energy. Similarly, federal initiatives, including the Executive Order – Preparing the United States for the Impacts of Climate Change issued in 2013, which focused the federal agencies on developing climate action plans, and Federal Highway Adminstration (FHWA) Order 5520 issued in 2014, which established the FHWA policy on climate change preparedness, have placed pressure on 5 IPCC, 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151 pp. officials to take proactive action on climate resiliency. The challenge for local officials that emanates from this focus on climate response planning is determining where to start and what is an appropriate level of response. Concurrently, the question of what level of resource commitment is required to adequately understand and address climate vulnerability needs to be objectively answered. Although these questions will be answered differently for each community, a few overarching issues need to be understood and integrated into community planning efforts. • Climate resiliency is not emergency management. A common approach to addressing climate impacts is to fold the issue into emergency management. Although there are overlaps, climate change resiliency is a distinct topic from emergency management and disaster response. Specifically, much of the impact of climate change will result from gradual changes that affect the overall infrastructure of a community. Although climate change may lead to more frequent and intense storms, or a greater frequency of droughts, it is the gradual increasing of temperature or changes in precipitation patterns that will ultimately impact everything from roads to water supplies for an individual community. Therefore, it is essential that communities look at climate resiliency from a long-term planning perspective rather than a disaster response or recovery perspective. This is a separate planning issue and requires separate analysis to understand the issues. • Climate change encompasses broad issues. The recent wildfires and floods in Colorado have placed an understandably significant focus on these issues for future resiliency planning. However, climate change impacts encompass a broad set of issues that go beyond a single type of extreme event. Specifically, an overemphasis on a single area will result in overlooking the impacts that are occurring over time in other areas. For example, a singular focus KNOWLEDGE NOW 3 on floods may result in overlooking the challenge of increasing temperatures on energy demand that may have a much broader and significant impact. It is essential to understand the community-wide impacts of climate change. • Climate change encompasses uncertainty. One of the greatest challenges for public officials is the need to make decisions regarding climate change with the uncertainty that accompanies climate projections. Unfortunately, this will not be eliminated in the near future. The arguments regarding which models are preferable for a given area and what downscaling methods are more appropriate will only continue to grow as greater attention is placed on this topic. It is essential to understand that there is no correct answer regarding how to address this uncertainty. Rather, the uncertainty needs to be incorporated into the decision making process. Specifically, officials need to gather as much information as possible from as many climate scenarios as possible and make a decision from the overall picture that is presented. • Climate impacts occur on multiple timelines. In contrast to singular events such as a flood or a wildfire, climate change impacts will occur over multiple timelines. Temperature increases may occur gradually over the next two or three decades while changes in precipitation may occur over a shorter timeframe. Similarly, the impacts of these changes will occur over different periods of time. The variability of floods may start to be seen within a decade while greater damages to roads and rail may take two decades to be seen in some areas. This variability needs to be considered when allocating resources. Climate change is a multi-impact, multi-decade event. The components of impact need to be separated and addressed independently. These factors illustrate the need to differentiate climate change planning from traditional planning ventures. However, this should not imply that a slow, cautious approach be invoked for climate resiliency planning. Rather, a proactive approach has been proven on a global basis to be the preferred method of addressing climate change impacts. Specifically, it is important to adopt a process that includes the following steps: • Be informed. Climate change is one of the most written about global issues in recent memory. Detractors and supporters alike publish on every aspect of climate change from model accuracy to environmental impacts to cost considerations. However, it is up to individual decision makers to obtain an independent level of fluency with the topic. Whether the preference for this fluency is in detailed technical information or broad policy implications, gaining an understanding of the issues associated with climate change that impact the local geographic region is essential for making informed decisions. • Determine broad vulnerabilities. Multiple frameworks now exist to assist public officials in planning for climate change. The FHWA and National Oceanic and Atmospheric Administration (NOAA) are both federal agencies that have released planning frameworks for climate change. Independent groups such as the American Planning Association and International Council for Local Environmental Initiatives (ICLEI) also have released planning frameworks. ICLEI – Local Governments for Sustainability is an international association of local and metropolitan governments dedicated to sustainable development. Additionally, specialty groups such as 100 Resilient Cities and C40 (a network of the world’s megacities committed to addressing climate change) have grouped resources that are now available to assist municipalities in resiliency planning. The common theme in each of these efforts is to provide decision makers with the tools and knowledge required to begin the planning process prior to investing significant resources on detailed studies that may or may not be required. • Determine adaptation options. Multiple options exist to address potential climate impacts in every infrastructure category. Some of these options, such as overdesigning culverts or enhancing building systems, require greater up-front costs while others, such as altering resurfacing timelines for roads or public awareness campaigns for water usage, require longer term planning efforts. Each of the approaches has advantages and disadvantages, but all are viable options with risks and benefits. The objective for planners must be to determine the approach that will best serve the needs of the individual municipality for the individual infrastructure sector of concern. • Implement plan. Once options are identified, a plan needs to be put in place that can be implemented over the necessary timeline. In contrast to emergency management, this planning is not about focusing on a discrete event. Rather, this plan must address both increased frequencies of discrete events as well as adaptation to long-term, incremental events. This often requires collaboration between multiple offices or agencies. As such, appointing an individual to oversee the implementation process who is positioned across a broad set of offices is essential. Climate change is multisectoral and as such must be addressed as a multi-office concern. Taking the Next Steps Sometimes it takes a disaster such as the floods and wildfires of 2013 to highlight the critical role that infrastructure plays in our daily lives. Power outages, washed out roads, and interruptions in public transportation demonstrate how our region is dependent on infrastructure. While we often take it for granted, the long-term rebuilding issues from these events highlight how fragile our infrastructure actually is and its increasing vulnerability to weather events. Simply put, it is not whether our infrastructure is at risk, but when will the next weather event cause it to fail? It is time to take a hard look at our infrastructure’s vulnerability to climate change. Public buildings have been 4 COLORADO MUNICIPAL LEAGUE designed to specific environmental conditions that may no longer be relevant in a decade. Likewise, roads, bridges, and water systems have been designed for specific environmental conditions that may also be out of date. Changes in these conditions — extremes of heat and cold; floods, and blizzards; excessive rain or drought — will lead to increases in maintenance costs that will far exceed the capacity of individual cities and counties. These statements are no longer the product of a small group of climate scientists. Rather, these are the findings derived from extensive engineering studies from around the world. The question for Colorado communities is not whether local infrastructure will be affected, but when and to what extent. Can communities afford to wait and see which climate change model might be slightly better? Recognizing a threat is the first step to better planning, the next step is to get informed and start implementing a plan. KNOWLEDGE NOW 5 Making the Right Decision the FiRst tiMe By Dawn-Marie BucklanD April 2015 | Government Finance Review 23 H ow often do you find yourself reflecting on a deci- sion — your own or someone else’s — and wishing it had gone differently? Who wouldn’t like to have a way of ensuring that the decisions they make today are the right decisions for tomorrow? Governments are constantly faced with choices, and emotionally charged issues create short-term pressures that don’t always lead to the best inter- est of the community in the long term. A financially resilient organization creates emotional distance from difficult issues and balances short- and long-term perspectives in making its decisions. Here’s a common scenario. A city is debating the merits of adding additional freeway access. An interchange would provide business access to commercially zoned land in a highly acclaimed economic development corridor. However, residents nearby fear that it would increase traffic and noise, jeopardizing their quality of life. The conversation quickly becomes emotional on both sides. What is the right decision? In another example, a celebrated development agreement promises to bring high-wage jobs and critical street improve- ments to the community. The project takes years to imple- ment, and the city and the developer work hand-in-hand to ensure its success. But the development changes hands during an economic downturn. The city finds that the new developer is in breach of contract, but there are no remedies in place to address the lack of performance. How could the city have approached the agreement differently in the begin- ning to avoid this unintended consequence? The public sector faces seemingly endless scenarios that demand complex decisions. All too often we find ourselves questioning the conclusions we reached in the past and agonizing over the decisions before us. Many organizations do make consistently sound decisions, however — decisions that enhance their resiliency. We need to ask ourselves what factors lead to such an outcome and how leaders can create a successful and productive dialogue when difficult decisions are on the horizon. A STRATEGY FOR MAkING TOUGH DECISIONS On the front end of a challenging decision, emotion can be intense, while a logical course of action feels distant and obscure. A 10/10/10 analysis counteracts this short-term bias by creating distance in decision making.1 The analy- sis asks decision makers to take a step back and consider the short-, mid- and long-term implications of their decision — how will they feel about it 10 minutes from now? Ten months from now? Ten years from now? The 10/10/10 analy- sis works because it explicitly identifies the short-term and emotional reasons for a decision and compares them to long- term considerations. Going back to the freeway interchange example, nearby residents and elected officials might feel a great deal of angst 10 minutes and even 10 months after the announcement of a decision to move forward. At the same time, commercial landowners and the business community might be very excited by the idea. Ten years later, the interchange would be an inherent part of the transportation system, providing safe and easy access to neighborhoods and commercial areas alike. The beauty of the 10/10/10 approach is that it can be used informally to simply and quickly think through impacts. The method can also be explained to stakeholders, prompting them to think through a decision more carefully. WHEN TO USE 10/10/10 ANALYSIS The 10/10/10 methodology is most likely to work well when the decision you face meets the following characteristics: n Significant Long-Term Implications. 10/10/10 analysis provides the greatest value where the long-term stakes are high. Providing healthcare at no cost for employees and retirees, for example, has very different financial impacts 10 minutes and 10 months after the decision than the cumulative effect after 10 years. n High Public Profile. Building and maintaining public trust is paramount. With high-profile issues such as a freeway interchange, emotions often run high on both sides of the argument. 10/10/10 helps provide the Creditworthiness and 10/10/10 Credit ratings encompass a number of factors relating to the long-term financial health of a government, and the credit rating a government receives has a very high public profile. Therefore, the potential of a given decision to affect credit ratings can be a powerful way to engage others in forecasting a decision’s impact 10 years down the road. 24 Government Finance Review | April 2015 perspective needed to make the right decision for the long term. n Not Easily Reversible. Some decisions cannot be easily undone if the choice later proves to be unwise. In these cases, 10/10/10 can add needed foresight. A 20-year devel- opment agreement binds a community to its terms for the duration. If the city in the second example had conducted a 10/10/10 analysis, decision makers might have seen past the initial euphoria of “getting the deal done” and real- ized the need for stronger terms and conditions to protect against the unintended consequences. n Multiple Processes or Plans Affected. Organizations can use 10/10/10 to assess the ultimate impact of a deci- sion about integrating plans. A long-term staffing plan is a great resource if thorough consideration is given to how it will be integrated into the budgeting and long-term finan- cial planning processes. The analysis helps all stakeholders distance themselves from the emotions provoked by the issue at hand, which posi- tions leaders to make those courageous decisions that might otherwise paralyze an organization. CONCLUSIONS Public service includes any number of issues that are rife with passion and emotion. Short-term bias is a natural and common response, whether because of emotions about pending changes or limited terms in office. Since many deci- sions cannot be undone without substantial costs or conse- quences, 10/10/10 analysis helps all stakeholders distance themselves from the emotions provoked by the issue at hand, positioning them to make better decisions. It provides an opportunity to question assumptions and identify options that will ultimately lead to better long-term results. y Note 1. Many people have written about 10/10/10 analysis for decision making. Sources include: Suzy Welch, 10-10-10: A Life-Transforming Idea (New York: Scribner, 2009); and Chip Heath and Dan Heath, Decisive: How to Make Better Choices in Life and Work (New York: Crown Business, 2013). DAWN-MARIE BUCKLAND is director of the Office of Management and Budget in the Town of Gilbert, Arizona. Before that, she was budget manager for the City of Chandler, Arizona. Buckland would like to acknowledge Deputy Town Manager Marc Skocypec for his contributions to this article. BY PHIL BERTOLINI, ANDREW SCOTT, AND LAURIE VAN PELT Planning F o R a Financial cRisis April 2015 | Government Finance Review 27 S ome governments are able to respond nimbly when changes are needed, while others struggle in the face of adversity, sinking deeper into financial distress with each successive crisis. Leaders who are dealing with financial stress sometimes make decisions that are less than optimal. They fail to consider a broad array of potential solutions because of immediate emotional pressures. Being resilient under conditions of financial stress requires making smart decisions that address short-term needs without making the long-term situation worse. Most governments have faced financial stresses in the past and will do so again in the future. Before the next finan- cial crisis hits, governments should consider developing a financial crisis policy, including a library of strategies that could be employed to deal with a financial crisis. DEVELOPING A POLICY Governments usually have evacu- ation or sheltering plans in place for emergencies such as fires, tornadoes, and earthquakes. These plans provide clear advance direction such as where to go and what to do, depending on the nature of the emergency. The plans might designate certain people as area leaders during an emergency, giving them special authority and responsi- bility for a limited time. There are periodic drills to practice for an automatic, predictable, and organized response. Why not use a similar approach in the event of a financial emergency? Having a financial crisis policy in place before the actual crisis can achieve benefits similar to those of a disaster policy. The basics for a sound financial emergency policy are outlined below. Define “Financial Emergency.” Governments often fail to take action when confronted with a financial emergency because the leaders are unaware of the magnitude of the situation or are slow to accept the facts. A pre-determined definition of financial emergency, combined with routine self-assessments of financial health,1 can save valuable time during a crisis — time that can then be used to better cope with the financial emergency. Deciding what constitutes a financial emergency in advance will provide clarity as to when a financial emergency policy should be invoked. Indications of crisis might include: n Recurring operating deficits. n A dependence on one-time sources of revenues to balance ongoing operations (such as selling assets). n Fund balance or cash levels that fall below a pre-defined threshold. n The inability to make timely payments to creditors. In defining a financial emergency, governments should refer to any extant financial policies for guidance. For example, a reserve policy might define the minimum accept- able levels of fund balance. In states that legally define when a financial emergency exists for local units of government, localities should design their policies to recognize and resolve the emergency before a potential state intervention. Delineate Procedural Steps. Governments should outline the pro- cedures they will use for addressing the emergency. Note that additional steps may be needed to meet the needs of the governing body. 1. Formally declare a financial emergency. An official, formal declaration should be made when the definition of finan- cial emergency has been met. 2. Designate responsibility for managing the emergency. Someone should be assigned to manage the emergency, and that person should appoint a core team consisting of subject matter experts in the areas of finance, human resources, operations/programs, and communications. The governing body may also delegate certain authorities to facilitate a rapid response. 3. Deploy a financial emergency management plan A flexible plan that has been pre-approved by the governing body should be in place to provide strategies the government can use to handle the crisis. The emergency team can create a plan for each individual emergency by outlin- BY PHIL BERTOLINI, ANDREW SCOTT, AND LAURIE VAN PELT Leaders who are dealing with financial stress sometimes make decisions that are less than optimal. They fail to consider a broad array of potential solutions because of immediate emotional pressures. 28 Government Finance Review | April 2015 ing the details of the situation and choosing the pre-approved strate- gies that will best mitigate these specific problems. 4. Identify and declare an end to the emergency. The policy should include predefined criteria for determining the end of a financial emergency. At that point, an offi- cial declaration that the financial emergency has ended should be issued. Any additional directives needed after the financial emer- gency, for monitoring or transi- tional purposes, should be included in the declaration announcement. DEVELOPING A PLAN When a government is confronted with a financial emergency, it probably cannot afford to spend a signifi- cant amount of time researching solutions. Instead, it makes sense for the jurisdiction to consider what other entities have done to resolve their financial crises and determine whether those solu- tions are applicable to the current situation. The government’s financial emer- gency management plan should be contain two parts: 1) a library of strategies the governing body has already approved for use in any situation that seems plausible (an economic recession is likely to occur at some point, but it proba- bly isn’t necessary to plan in detail for, say, a collapse of the currency); and 2) a customized plan, or playlist, that the emergency team will create to address a specific financial emergency, once it has been declared. Build a Library of Solutions. Once you’ve identified all the potential financial emergency scenarios, it’s time to build a solutions library. Identify different options — acceptable short-term solutions and long-term strategies the government might use to cope with the crisis and regain financial sus- tainability. You can draw from the library of retrenchment tactics the governing body has already approved for dealing with likely potential financial crises policy as needed. These options might include a freeze on hiring, purchasing, and travel, for example. The solutions library should include tools the financial emergency team can use to closely monitor and report on rev- enues and expenditures on at least a monthly basis — in this way, the team can know how the techniques are performing when they are implemented. It should also include systems of accountability for staff members who manage budgets and for achieving service objectives during the emergency. Create a Playlist. The second, episode-specific part of the plan goes into effect after an emergency is declared. This is where the emergency team outlines the cause(s) of financial distress and chooses which of the pre-approved near-term and long-term strategies should be used to resolve the emergency. “Self Help” for Financial Crisis Planning To plan effectively for a financial crisis, governments need to remember three things: n know What You Have. Many governments do not have a basic understanding of the assets at their disposal. Assets such as financial, physical, and human resources must be clearly identified in order to determine the organization’s baseline. n know What You Need. After a baseline is determined, governments must start identifying what needs to be done to either halt the financial crisis or recover from the crisis. Both short-term and long-term tactics are paramount to success. n know How to Get Help. Governments cannot stick their heads in the sand when a financial crisis presents itself. Knowing who to rely on and where to get assistance is a must. Governments usually have evacuation or sheltering plans in place for emergencies such as fires, tornadoes, and earthquakes. Why not use a similar approach in the event of a financial emergency? April 2015 | Government Finance Review 29 Note that your government can also put pre-approved options together in advance. That way, it will be able to respond even more quickly and effec- tively to any given scenario — a severe economic recession, for instance. CONCLUSIONS Once a government has taken the steps outlined above — defined a finan- cial emergency, adopted a financial policy, and outlined a plan — the plan can be tested through simulation drills. As with traditional emergency manage- ment, practice makes it easier to take swift action when a real crisis occurs. This article provides the necessary foundation for building a solid financial crisis response plan, including a pre-approved tactical and strategic responses to finan- cial distress. Keep in mind that the most successful disaster plans are those that are practiced over and over again, and a financial crisis plan is no different. y Note 1. Regular financial checkups help prevent financial crisis. Governments should conduct a periodic financial health self-diagnosis and report the results to the chief elected official and governing body. Elected officials and staff can then take steps to remediate any financial weaknesses. PHIL BERTOLINI is deputy county executive/chief information officer for Oakland County, Michigan. ANDREW SCOTT is budget director for the City of Portland, Oregon. LAURIE VAN PELT is director of management and budget for Oakland County. A pre-determined definition of financial emergency, combined with routine self- assessments of financial health, can save valuable time during a crisis — time that can then be used to better cope with the financial emergency. A‐1 | Page TOWN OF FRASER FINANCIAL POLICIES RESERVE POLICY APPENDICES General Fund Reserve Policy The Town will achieve a Committed General Fund (GF) Reserve balance of one million dollars, or an amount equal to 3% of annual assessed valuation. The Town also maintains reserves that are required by law or contract and that serve a specific purpose. GF Committed Reserve: 2015 Assessed Valuation = $34,268,840 x 3% = $1,028,000. The committed reserves allowable uses are for large scale emergencies or in the event of an extended economic downtown. These reserves can also be utilized for un- identified opportunities, with a prompt re-payment to the reserve fund. Currently the Town’s preliminary budget has $1,000,000 accumulated in its General Fund Committed Reserve. The Town will maintain an unassigned fund balance (the balance of funds after all restrictions and reserves have been assigned) equal or greater than four months of budgeted expenditures. GF Unassigned Fund Balance for 2016 will be approximately: $3,180,644/12 x 4= $1,060,000 this number may adjust depending upon the final GF adopted budget for the year. (This number could be rounded down to $1,000,000 – however the current preliminary GF unassigned fund balance will be only $868,000 – missing the goal by $132,000.) In addition the Town will maintain a Committed Reserve fund balance equal to one quarter of the projected sales tax collections for the year for General Fund challenges and opportunities. Additional GF Committed Reserves – 2016 Projected Sales Tax Collections = $1,800,000 x 25% = $450,000. This amount has not been funded in any of the reserves. Additionally a Committed Reserve fund balance equal to or greater than twenty-five percent (25%) of the insured value of capital assets owned by the General Fund will be established or equivalent funds will be transferred to the CAF as a Committed Reserve to cover unexpected/unanticipated/unfunded liabilities related these assets. Additional GF Committed Reserves – the GF insures roughly $9,300,000 in assets x 25% = $2,325,000. A majority of these insured assets would fall under the CAF’s responsibilities – meaning streets, bridges, buildings, parks and trails. Currently no reserves or unassigned fund balances have been established in the CAF. Another way of computing the above reserve could be a computation utilizing the Investment in Fixed Assets line item in the GF (which includes CAF assets) of $4,088,207 x 25% = $1,000,000 (rounded down). A‐2 | Page CONSERVATION TRUST FUND (CTF) The CTF always carries an unassigned fund balance, received from State Lottery proceeds, with no reserves. Expenditures utilizing CTF dollars would be considered restricted. The State mandates allowable expenditures of CTF funds for the acquisition of or capital expenditures related to public park and recreational related facilities. CTF funds are leveraged with General Fund expenditures and with other granting partners when appropriate. CAPITAL EQUIPMENT REPLACEMENT FUND (CERF) The CERF’s revenue streams are: State Highway User Tax Fund disbursements and General Fund transfers. Transfers from the GF are designated for both our Public Safety Officers Fleet and Public Works (PW) heavy and light equipment purchases. Police vehicles are currently funded on a purchase year basis, while the PW funds are spent per the fifteen year capital investment plan with all remaining dollars in the Fund being held within the unassigned fund balance. CAPITAL ASSET FUND (CAF) The CAF is currently funded by transfers from the General Fund. The CAF has two responsibilities – the current maintenance and repair of existing assets (Streets, Parks, Open Space, Buildings, Trails and Bridges) and the future acquisition or expansion of the above referenced asset classes. DEBT SERVICE FUND (DSF) The DSF is where the Town allocates resources for the repayment of its long term bonded indebtedness. The DSF has a Restricted Reserve (represents the portion of fund balance that is subject to externally enforceable legal restrictions) of $300,000, and a Committed Reserve estimated to be $273,000at year-end 2015. ENTERPRISE FUNDS (Water, Wastewater and Joint Facilities Funds) Water, Wastewater and the Joint Facilities Funds (WF, WWF and JFF, respectively) will have a committed fund balance for operational emergencies of five hundred thousand dollars $500,000 each. Both Enterprise Funds (WF and WWF) will maintain a committed reserve fund balance of $500,000 plus twenty-five percent (25%) of the depreciated system value for capital projects. This committed fund balance will also increase as the Fund will attempt to operate on a “pay-as- you-go” manner based upon a five year capital investment project schedule as maintained by the system operator. Water Fund Reserves: WF Committed Reserve – Currently the WF has $460,000 in its committed reserve, the addition of $40,000 should be expensed to the reserve. A‐3 | Page WF Additional Committed Reserves – represents 25% of the depreciated value (DV) of the system. DV = $3,568,312 x 25% = $892,000 (rounded). This reserve should be funded as soon as possible. (An alternate metric would be based upon Insured assets of $11,830,212 x 25% = $2,960,000,) WF Unassigned Fund Balance – based upon the numbers in the preliminary 2016 Budget would be: $1,664,253/12 x 4= $550,000 (rounded). The WF’s unassigned fund balance at year-end is roughly $400,000 short of target. Wastewater Fund Reserves: WWF Committed Reserve – Currently the WWF has only an unassigned fund balance. The Board should expense $500,000 of unassigned fund balance to a committed reserve for operational emergencies. WWF Additional Committed Reserves – “as above” DV = $884,726 x 25% = $221,000 (rounded) – these funds should be combined with the above and expensed to committed reserves (An alternate metric would be based upon Insured assets of $608,766 x 25% = $1,520,000). WWF Additional Committed Reserves – the WWF has additional responsibilities in regards to its membership within the Upper Fraser River Wastewater Treatment Plant, these relate to the JFF’s Capital Replacement Reserve, and future capacity increases, and unfunded mandates. In fiscal years 2016 thru 2020 this membership represents a liability for the TOF currently estimated in the amount of $1,500,000 - $7,000,000 – for copper and nutrient treatment. Also, there is looming a mandatory capacity increase of the plant (dependent on Inflow & Infiltration) but currently there is no good estimate of costs available nor an accurate timeline – but we should be identifying and reserving funds appropriate for this inevitability. As above I would recommend a committed reserve amount equal to 25% of the Investment in Capital (the Plant); $3,972,180 x 25% = $993,000, the TOF’s ownership share of this amount would be roughly $330,000. WWF Unassigned Fund Balance – (minimum four months of operating expenses) based upon the numbers in the preliminary 2016 Budget this balance should be: $880,244/12 x 4= $293,000 (rounded). Unassigned fund balance at year end 2016 is estimated to be roughly $2,235,000, this amount includes funding the committed reserves for the WWF in the amount of $1,051,000. Summary: General Fund A‐4 | Page Committed Reserve of $1,000,000 will be met at year-end 2015 with Board approval of the $250,000 expense to reserves. Unassigned Fund Balance will drop below recommended levels in 2016 Additional Committed Reserves are not met for sales tax “insurance” Additional Committed Reserves are not met nor transferred to the CAF to cover GF fixed assets. Conservation Trust Fund Reserves are not applicable, but unassigned fund balance should be grown for the next identified project/s. Capital Equipment Replacement Fund Currently reserves are not utilized within the CERF, instead efforts are made yearly to increase unassigned fund balance with GF transfers. Capital Asset Fund Reserves have not been funded. Debt Service Fund Reserves are fully funded. Water Fund Committed Reserve for operational emergencies is $40,000 from being fully funded. Committed Reserve for the depreciated value of the system has not been funded. Unassigned Fund Balance in 2016 is $400,000 short. Wastewater Fund Committed Reserves for operational emergencies should be funded from unassigned fund balance. Committed Reserves for the depreciated value of the system should be funded from unassigned fund balance. Committed Reserves for JFF depreciated value of the system should be funded from unassigned fund balance. Committed Reserves for future expansion at the plant should be evaluated and funded in the near-term. Unassigned Fund Balance in 2016 meets recommendations. BY SHAYNE KAVANAGH AND KARA SKINNER Sizing Your reServe S | A risk-Based Approach October 2013 | Government Finance Review 11 C ity officials in Colorado Springs, Colorado, had been holding an on going conversation about the right level of reserves. The city’s primary revenue source, at more than half of general fund revenues, is the sales tax, while the property tax constitutes less than 10 percent of revenues. This means that the city’s revenue is subject to a greater degree of volatility than would perhaps befall a municipality with greater reliance on the property tax. Further, legislative tax and expenditure limits prevent the city from freely making changes to tax rates in response to changing financial condi- tions. On top of these fiscal limitations, the city is at risk for dif- ferent types of natural disasters (wild fires, floods, blizzards), any of which would require a quick and decisive public safety response from the city government. Finally, the city has an aging capital infrastructure, particularly its bridges and storm sewers, and a significant failure in any of these assets could place an unexpected and large burden on the city’s finances. These risks called for a financial hedging strategy — in other words, a deliberate and strategic amount of general fund financial reserves. To help local governments deter- mine the optimal level of reserves, the Government Finance Officers Association has been developing a risk-based approach to sizing reserves. A number of local governments have used the general framework (which has been described in the GFOA publication, Financial Policies) to make a determination as to the optimal reserve size for their circumstances.1 In summer 2012, the GFOA was able to work with the City of Colorado Springs to apply the risk-based model. This article describes that process, including back- ground on the project, the “triple-A” framework for analyzing risks, the application of the triple-A approach to Colorado Springs’ risk factors, and, finally, what happened in Colorado Springs as a result of the analysis. ANALYZING UNCERTAINTY: THE TRIPLE-A APPROACH Municipal governments are subject to a number of risks, often of highly uncertain probability and magnitude, that require them to maintain reserves. Since these risks are impossible to predict, the best that anyone can do is to be prepared. The accomplished forecasting scientist, Spyros Makridakis, has suggested a “triple-A” approach for dealing with this kind of uncertainty.2 1. Accept. We have to accept that we are subject to uncer- tainty, including events that we haven’t even imagined. For example, Colorado Springs experienced a severe down- turn in sales tax revenues as a result of the 2001 dot-com bust and the 2007 Great Recession. Sales taxes are subject to severe downturns due to rare and unpredictable events. Further, because it is relatively easy to imagine scenarios that could cause the economy to suffer (e.g., European financial crisis, federal debt crisis, etc.), the economy is subject to other potentially dangerous unknowns that we cannot imagine. 2. Assess. Next, we must assess the potential impact of the uncertainty. History can provide a baseline refer- ence. Looking at the sales tax declines Colorado Springs experienced after the dot-com bust and Great Recession, we see that a downward trend has persisted for as long as 25 months, and the greatest severity has been a 0.53 percent average monthly decline over the life of the downturn (during the Great Recession that started in December 2007). 3. Augment. The range of uncertainty that we really face is almost always going to be greater than we assess it to be, so we should augment that range. Many economists believe that the effects of the Great Recession — the base- line for Colorado Springs’ worst-case monthly decline — would have been much worse without the interventions of the federal government (although the long-term impact of those actions is, of course, still unknown). What if con- tinued gridlock in the federal political system (or other, unimagined, circumstances) were to prevent an effective mitigating response to the next crisis? As a rule of thumb, Makridakis suggests doubling your range of uncertainty if you have little historical data to rely on, or multiplying it by 1.5 if you have more. The GFOA used the triple-A approach to analyze each of Colorado Springs’ major risk factors — sales tax volatility, bridges and storm sewers, and natural disasters — and sug- gested reserve amounts based on that analysis. The city was subject to other risks, as well, but these were deemed to be of Municipal governments are subject to a number of risks, often of highly uncertain probability and magnitude. 12 Government Finance Review | October 2013 secondary importance and were there- fore analyzed less rigorously.3 SALES TAX VOLATILITY Initially, the GFOA analyzed monthly sales tax revenues going back to 1996 to determine the degree and, critically, the type of volatility the sales tax is sub- ject to: economic, seasonal, or random variation. The GFOA’s analysis showed that more than 90 percent of the variation in Colorado Springs’ sales tax revenue could be explained by fundamental economic trends and business cycles.4 This meant that risk due to economic downturns should be the focus of the analysis. An unexpected economic shift could have serious rami- fications for city revenues. Exhibit 1 shows a “trend-cycle” line for sales tax (which factors out seasonal volatility)5 over- laid on monthly sales tax revenues. The red arrows show the beginning and endpoints of significant down- trends. The first one started in April 2001 and lasted until May 2003, when the trend cycle declined 6.6 percent over 25 months, or about 0.25 per- cent per month. The second started in July 2007 and lasted until April 2009, when the trend cycle declined 11.2 percent, or a bit more than 0.5 percent per month. Once the level of risk is assessed, it must be augmented. The GFOA and the city had a good deal of data, making a 1.5 multiplier appropriate. The result was a 0.8 percent monthly decline as the probable worst-case scenario, which translates to a potential 20 percent decline in sales taxes over 25 months. However, the city would presumably reduce its Exhibit 1: Sales Tax Monthly Revenue and Trend Cycle An unexpected economic shift could have serious ramifications for city revenues. Monthly Sales Revenues 14 12 10 8 6 4 2 0 Mi l l i o n s o f D o l l a r s Ju l y 1 9 9 6 De c e m b e r 1 9 9 6 Ma y 1 9 9 7 Oc t o b e r 1 9 9 7 Ma r c h 1 9 9 8 Au g u s t 1 9 9 8 Ja n u a r y 1 9 9 9 Ju n e 1 9 9 9 No v e m b e r 1 9 9 9 Ap r i l 2 0 0 0 Se p t e m b e r 2 0 0 0 Fe b r u a r y 2 0 0 1 Ju l y 2 0 0 1 De c e m b e r 2 0 0 1 Ma y 2 0 0 2 Oc t o b e r 2 0 0 2 Ma r c h 2 0 0 3 Au g u s t 2 0 0 3 Ja n u a r y 2 0 0 4 Ju n e 2 0 0 4 No v e m b e r 2 0 0 4 Ap r i l 2 0 0 5 Se p t e m b e r 2 0 0 5 Fe b r u a r y 2 0 0 6 Ju l y 2 0 0 6 De c e m b e r 2 0 0 6 Ma y 2 0 0 7 Oc t o b e r 2 0 0 7 Ma r c h 2 0 0 8 Au g u s t 2 0 0 8 Ja n u a r y 2 0 0 9 Ju n e 2 0 0 9 No v e m b e r 2 0 0 9 Ap r i l 2 0 1 0 Se p t e m b e r 2 0 1 0 Fe b r u a r y 2 0 1 1 Ju l y 2 0 1 1 De c e m b e r 2 0 1 1 n Monthly Revenue n Trend-Cycle October 2013 | Government Finance Review 13 spending in the event of such a severe downturn, so a reserve large enough to cover the entire amount of the rev- enue decline wouldn’t be necessary. The Colorado Springs budget office estimated that the budget could be reduced by a little less than $10 mil- lion without creating a major disrup- tion to services, which meant that the city should maintain a reserve of at least $13 million to fill the remaining revenue gap and to help it make a “soft landing” in the case of a major revenue decline. BRIDGES AND STORM SEWERS General fund reserves may be needed to repair or replace an asset that fails unexpectedly. In Colorado Springs, two asset classes were deemed to be at the greatest risk for fail- ure, due to the condition of the city’s asset stock: bridges and storm sewers. Risk is defined as the product of probability of failure and the consequences of failure. In this case, the probability of failure was based on a bridge sufficiency index provided by city staff. A lower index score indicates a bridge that is in worse condition and ultimately a higher risk (prob- ability) to fail. (See Exhibit 2.) Consequence is based on cost — the higher the replacement cost of an asset, the higher the consequence to the city if that asset were to fail.6 As Exhibit 2 shows, 13 bridge structures were identified as having a high risk rating (those in the red area, which have a total score of 8-10, adding the scores from each axis). These bridges have an estimated replacement cost of $22,752,672, which averages out to about $1.75 million per bridge. A reserve that covers one or two bridges should be adequate, but using the triple-A rule of doubling our expectation for uncertainty, it would be prudent to prepare for the premature failure of three of these bridges. This would require reserves of $5.25 million. The city also manages 406 miles of storm lines. No installa- tion dates or condition assessments were available for any of them, but the estimated replacement cost for all storm sewers is a bit more than $588 million. Since the information needed to assess risk of failure is not available, the best that can be done is to make an assumption. About 10 percent of the total dollar value of the city’s bridge inventory is in the higher risk category, so that was chosen as a reasonable number for the storm sewer estimate; this would translate to $58 million. Approximately 20 percent of the high-risk category was rec- ommended as a reserve amount for the bridges, which would equate to $11.6 million for the storm sewers. General fund reserves may be needed to repair or replace an asset that fails unexpectedly. Exhibit 2: Risk Profile for Bridges and Culverts 34 Assets $97,543,123.50 7 Assets $6,959,355.00 4 Assets $1,345,308.00 1 Asset $741,195.00 77 Assets $1,090,359.00 39 Assets $25,177,155.00 5 Assets $3,852,240.00 7 Assets $711,121.50 9 Assets $889,242.00 6 Assets $14,341,650.00 No Assets N/A 2 Assets $412,344.00 3 Assets $1,353,675.00 No Assets N/A No Assets N/A 8 Assets $17,801,817.00 2 Assets $1,772,910.00 1 Assets $1,544,010.00 48 Assets $18,897,532.50 64 Assets $13,759,009.50 104 Assets $20,381,443.50 14 Assets $5,716,803.00 13 Assets $2,933,257.50 35 Assets $8,967,537.00 Possibility of Failure 5 4 3 2 1 0 1 2 3 4 5 High Co n s e q u e n c e o f F a i l u r e 2 Assets $1,633,935.00 Low High 14 Government Finance Review | October 2013 NATURAL DISASTERS Colorado Springs is subject to natu- ral disasters that pose a significant threat to life and property, especial- ly wildfires and floods. Wildfires are the most important risk — in fact, the 2012 Colorado wildfire occurred when this analysis was originally being conducted and was, at the time, the largest wildfire in Colorado history. It affected approximately 12,000 acres and burned 347 homes. A response to large wildfires can be expensive, requiring police and fire personnel to suppress the fire and evacuate people. Reimbursement from the Federal Emergency Management Agency is not immediate and does not typically cover all the costs of responding. Further, a fire is likely to interrupt the city’s sales tax revenue. The city estimated costs for the 2012 fire at $3.75 mil- lion in personnel time, mutual aid costs, and other direct expenses. This estimate covers the actual firefighting within the city limits and the emergency protective measures taken (e.g., evacuation, security, activation of the emergency opera- tions center, etc.). The expenses eligible for a 75 percent FEMA reimbursement are estimated at $2.15 million. The FEMA-ineligible expenses combined with the 25 percent of unreimbursed expenses comes to $2.14 million — although at least some of this amount is expenses that the city would have incurred regardless of the fire, such as on-duty firefighters. Floods are also a concern because they damage infrastruc- ture, require a city emergency response, and require debris removal afterward. Colorado Springs’ most severe floods were in 1935 and 1965; otherwise, smaller floods occur about 6 or 7 times in a 10-year period. The last flood that qualified as a FEMA disaster was in 1999. The city’s cost for dealing with the flood of 1999 was $2,670,158. The federal share of the project was 75 percent, or approximately $2 million; the state share was 12.5 percent, or $333,770; and the city’s share was the remaining 12.5 percent, or $333,770. In 2012 dollars, this would equate to about $3.67 million in total costs and $460,000 for the city’s final share. Although Colorado Springs faces risks from several types of extreme events that have the potential to cause loss of life and property and to disrupt business, these extreme events do not appear to constitute a catastrophic risk to the city’s financial position. For example, a reserve of $4 million (compared to the city’s $220 million in annual revenues) would be more than adequate to cover the cost of either the 2012 fire or a flood of simi- lar severity to the 1999 flood, before FEMA reimbursement. However, the triple-A approach warns that the city would do well to augment the level of risk it was preparing for, and given the very limited number of data points to inform the analysis, a higher multiplier was appropriate. To illustrate: Multiplying the city’s total cost for the 2012 fire — $3.75 million — by 2 totals $7.5 million. Much of the cost for an extreme event would be reimbursed by other parties, however, and some of this figure would represent costs the city would incur, regardless (e.g., regular salaries for public safety personnel). Therefore, a $7.5 million reserve might be excessive. Analysis indicated that about a third of the costs for the most recent fire would have been incurred as the normal cost of doing business, and about half of the reimbursement from FEMA can be expected to be received within six months of the expenditure. Therefore, a reserve of $3.3 million might represent the minimum prudent reserve amount; it accounts for some of the costs the city would have to bear in responding to an extreme event that would be part of its regular budget, and for the significant por- tion of the costs that would be reimbursed quickly by FEMA. A reserve of $5 million might be a middle ground because it does not account for FEMA reimbursement (which is outside of the city’s control), but considering the need for a hedge against floods (and blizzards), a reserve up to $7.5 million would be prudent. PUTTING IT ALL TOGETHER INTO A RESERVE TARGET To summarize the amounts of reserve our analysis suggested would be prudent for the city to maintain, based on an analysis of the risk factors (including the results for analyses that were not described in this article, due to the space limits): Leading municipalities often find it helpful to segment their reserves into different categories, making the purpose of the reserve more transparent. October 2013 | Government Finance Review 15 n $13 million for the effect of uncertain economic condi- tions on sales tax, as described in this article. n $7.5 million for the effect of uncertain economic condi- tions on other revenues. This accounted for uncertainty around building permit revenues and other minor revenue sources. n $6.25 million for uncertainty regarding pension payments. This related to state policy affecting the state-run pension system the city participates in. n $5.25 million for critical bridge failure and $11.6 million for critical storm sewer replacement, for a total of $16.85 million. n $5 million to $7.5 million for extreme events, as described in this article. n $2 million to $4 million for expenditure spikes from law- suits. This was based on the exposure to actual lawsuits the city was subject to at the time, and an estimate of the poten- tial damages and probability of incurring those damages. Many cities express their reserve policy target as a single number (e.g., 16 percent of revenues). However, the GFOA has found that leading municipalities often find it helpful to segment their reserves into different categories, making the purpose of the reserve more transparent. For example, a reserve for “emergencies” and a reserve for “economic uncertainty” would provide more clarity about the purpose of the reserves than one all-encompassing reserve. The first three bullets above could comprise the budgetary uncer- tainty reserve, while the last three would form the emergency reserve, leading to the targets shown in Exhibit 3.7 This provided a total target of about 25 percent of general fund revenues.8 This was acceptable to the mayor and council because it was based on a transparent assessment of the risks the city faced, and it provided a known, prudent level of extra “cushion” that took into account the impact of issues that were of pressing concern to the community (e.g., wildfire). A comparative analysis of the target with comparable cities showed that the target level of reserves was similar to the level of reserves actually maintained by other cities (it was slightly less). HOW THE ANALYSIS PLAYED OUT Further events in Colorado Springs proved the value of the triple-A approach. The city worked hard to build its 2012 Exhibit 3: Categories of Reserves Budgetary Uncertainty Reserve $13 million for sales tax economic uncertainty + $7.5 million for economic uncertainty in other revenues + $6.25 million for pension payment uncertainty = $27 million, or approximately 12.5% of general fund revenues* as budgetary uncertainty reserve Emergency Reserve $5.25 million for critical bridge failure and $11.6 million critical storm sewer replacement, for a total of $16.85 million + $5 million to $7.5 million for extreme events + $2 million to $4 million for expenditure spikes from lawsuits = $27 million, or approximately 12.5% of general fund revenues as an emergency reserve * Based on about $220 million general fund revenue, per 2012 budget estimates About the City The City of Colorado Springs is a community of 416,427 people, located about 70 miles south of Denver. At an elevation over 6,000 feet, Colorado Springs sits at the base of Pikes Peak, one of the most famous American mountains, and boasts of 300 days of blue skies each year. It is home to Garden of the Gods, the Air Force Academy, the U.S. Olympic Committee Headquarters and Training Center, and the world-famous Broadmoor Hotel. 16 Government Finance Review | October 2013 end-of-year unrestricted fund balance to 23.3 percent of the 2013 expenditure budget, nearly reaching its goal of 25 per- cent. However, a series of events changed that. n Transit litigation settlement reduced the reserve to 19.2 percent of the 2013 amended expenditure budget (the reader will note there was an allowance for settlements in Exhibit 3). n The burn scar left by the 2012 Waldo Canyon Fire placed the city at increased risk for flooding, so the mayor requested, and the City Council approved, a supplemental appropriation of $8.8 million from the reserves for emer- gency storm water capital projects to address the most critical flood risks. The City Council understood that a portion of the city’s reserves are held to fund projects that will reduce a risk (in this case, massive flooding) that, if it occurred, would have to be remediated later, at even greater expense. n The city was affected by the Black Forest fire, in an unin- corporated populated area that borders the city. This fire was 50 percent more destructive than the 2012 Waldo Canyon fire, which had been the worst in Colorado his- tory up to that point, measured by the number of homes destroyed. Fortunately, the city was prepared to handle the immediate response cost with its remaining reserves. Ultimately, the city’s reserves were reduced to 14.4 percent of the 2013 amended expenditure budget, still providing a hedge against the other risks it faces. The mayor and City Council understand, however, the importance of the reserves for responding to all of the city’s risks and are working with staff to replenish the reserve as soon as is practical. y Notes 1. The GFOA best practice, Appropriate Level of Unrestricted Fund Balance in the General Fund, recommends that general purpose governments maintain an unrestricted general fund balance of no less than two months of regular general fund operating revenues or regular general fund operating expenditures. However, the document emphasizes that this recommendation is just a baseline and that governments must deter- mine the optimal level of general fund reserves for their own particular circumstances. 2. See: Spyros Makridakis, Robin Hogarth, and Anil Gaba, Dance with Chance: Making Luck Work for You (Oxford: Oneworld Publications) 2009. 3. For details on how all risk factors were analyzed, see the full report about this project, “A Risk-Based Analysis of General Fund Reserve Requirements: A Case Study of the City of Colorado Springs,” available at www.gfoa.org/research. 4. The GFOA used a method of data “de-seasonalization” known as multipli- cative decomposition to arrive at this conclusion. 5. The trend-cycle line is calculated by taking a 12-month centered moving average of actual monthly sales tax revenue. For example, the moving average for January 2005 would be an average of August 2004 through July 2005. February 2005 would be an average of September 2004 through August 2005, and so on. A 12-month moving average smooths out sea- sonal variation, leaving only the trend cycle. 6. Further analysis could be conducted with city staff to refine asset replace- ment costs and review the risk rating to incorporate more factors (i.e., traffic count, location, major structures). 7. Targets were rounded to nearest whole numbers for ease of use in policy making. 8. While some of the risks are clearly independent, some are not. If the risks are independent (i.e., the occurrence of one has no bearing on the occurrence of another), an argument could be made for holding less in reserve than the sum of the subcomponents. But because the level of independence was very complex to estimate, it was decided not to assume any level of independence. Hence, the target is probably larger than the city would need at any one time. SHAYNE KAVANAGH is senior manager of research in the GFOA’s Research and Consulting Center in Chicago. He can be reached at skavanagh@gfoa.org. KARA SKINNER is chief financial officer for the City of Colorado Springs, and during her tenure with the city, she has served in a number of positions in the Budget Office and the Finance Department. Skinner has taught economics as an adjunct instructor at University of North Florida, Jacksonville University, and the University of Hawaii. Just prior to serving the City of Colorado Springs, she was the economist for the Hawaii State Public Utilities Commission. She holds a bachelor’s degree in economics from the University of Colorado and a master’s degree in economics from Duke University. 12/31/2015 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget GENERAL FUND REVENUE TAXES 10-31-100 General Fund Property Tax 196,488 197,265 196,785 197,265 200,000 205,000 207,000 208,000 209,000 210,000 220,000 225,000 230,000 235,000 235,000 10-31-200 Specific Ownership Tax 10,682 10,000 9,071 10,500 10,200 10,500 10,500 11,000 11,000 11,500 11,500 11,500 12,000 12,000 12,000 10-31-300 Motor Vehicle Tax 4,420 4,200 2,609 4,200 4,200 4,250 4,250 4,500 4,500 5,000 5,000 5,000 5,000 5,000 5,000 10-31-400 Town Sales Tax 1,738,348 1,595,000 1,017,608 1,825,000 1,800,000 1,805,000 1,810,000 1,815,000 1,820,000 1,820,000 1,820,000 1,820,000 1,825,000 1,850,000 1,850,000 10-31-410 Use Tax - Building Materials 165,397 65,000 230,804 235,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 10-31-420 Use Tax - Motor Vehicle Sales 66,954 55,000 48,588 65,000 60,000 65,000 65,000 65,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 10-31-430 State Cigarette Tax 4,277 4,000 2,274 4,000 4,000 3,850 3,800 3,750 3,700 3,650 3,650 3,650 3,650 3,650 3,650 10-31-800 Franchise Fees 55,006 50,000 31,545 52,000 52,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 Sub-Total 2,241,572 1,980,465 1,539,282 2,392,965 2,215,400 2,233,600 2,240,550 2,247,250 2,258,200 2,260,150 2,270,150 2,275,150 2,285,650 2,315,650 2,315,650 LICENSES & PERMITS 10-32-100 Business License Fees 13,663 12,750 12,580 12,660 13,000 13,100 13,200 13,350 13,500 13,500 13,750 13,750 13,750 13,750 13,750 10-32-110 Regulated Industry Fees/Taxes 28,806 25,000 72,257 105,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 Sub-Total 42,468 37,750 84,837 117,660 63,000 63,100 63,200 63,350 63,500 63,500 63,750 63,750 63,750 63,750 63,750 INTERGOVERNMENTAL 10-33-100 Grants 10,000 166,000 10,000 156,000 20,000 0 0 0 0 0 0 0 0 0 0 Sub-Total 10,000 166,000 10,000 156,000 20,000 0 0 0 0 0 0 0 0 0 0 CHARGES FOR SERVICES 10-34-100 Annexation Fees 0 1,000 275 275 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 10-34-110 Zoning Fees 2,500 1,500 8,925 8,925 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 10-34-120 Subdivision Fees 15,400 1,500 29,550 29,550 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 10-34-130 Miscellaneous Planning Fees 1,905 1,000 2,040 2,040 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 10-34-150 Affordable Housing Impact Fee 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-34-740 Fees in Lieu of Park Land 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-34-750 WTHP Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 19,805 5,000 40,790 40,790 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 FINES & FORFEITURES 10-35-100 Court Fines 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-35-200 Police Dept. Sur-Charge 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 MISCELLANEOUS REVENUE 10-36-100 Interest Earnings 3,156 3,250 2,836 3,500 3,500 3,650 3,750 4,000 4,500 4,500 4,500 5,000 5,000 5,000 5,000 10-36-300 Rental Income 11,420 9,500 12,975 14,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 10-36-500 Sale of General Fixed Assets 6,163 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-36-600 Reimbursable - Mustang 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-36-610 Reimbursable - Prof Services 178,944 100,000 82,833 100,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 10-36-620 Reimbursable - Night Shuttle 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-36-900 Miscellaneous Revenue 34,660 30,000 32,945 33,000 30,000 30,000 30,000 30,500 31,000 31,500 32,000 32,500 33,000 33,500 34,000 Sub-Total 234,343 142,750 131,589 151,000 96,000 96,150 96,250 97,000 98,000 98,500 99,000 100,000 100,500 101,000 101,500 SPECIAL ASSESSMENTS 10-37-100 Byers Vista SID 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 OTHER SOURCES AND TRANSFERS 10-39-100 Bond Proceeds 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-39-900 Transfers in from Other Funds 0 10,000 0 10,000 0 0 0 0 0 0 0 0 0 0 0 10-39-999 Unassigned Fund Balance 2,009,110 2,003,613 2,116,145 2,116,145 1,649,403 868,159 99,689 (1,206,062)(2,339,921)(3,008,072)(2,634,549)(3,076,995)(2,842,418)(3,116,491)(3,032,173) Sub-Total 2,009,110 2,013,613 2,116,145 2,126,145 1,649,403 868,159 99,689 (1,206,062)(2,339,921)(3,008,072)(2,634,549)(3,076,995)(2,842,418)(3,116,491)(3,032,173) GENERAL FUND "NEW" REVENUES 2,548,189 2,341,965 1,806,499 2,858,415 2,399,400 2,397,850 2,405,000 2,412,600 2,424,700 2,427,150 2,437,900 2,443,900 2,454,900 2,485,400 2,485,900 GENERAL FUND TOTAL REVENUE 4,557,299 4,345,578 3,922,643 4,984,560 4,048,803 3,266,009 2,504,689 1,206,538 84,779 (580,922)(196,649)(633,095)(387,518)(631,091)(546,273) Page 1 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget EXPENDITURES TOWN BOARD 10-41-110 Salaries 16,460 26,000 15,360 23,000 30,000 30,000 31,000 31,000 32,000 32,000 32,000 32,000 32,000 32,000 32,000 10-41-220 FICA Tax 1,259 1,989 1,175 1,800 2,295 2,295 2,372 2,372 2,448 2,448 2,448 2,448 2,448 2,448 2,448 10-41-280 Training Programs 7,448 6,000 3,152 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 10-41-290 Travel, Meals and Lodging 4,555 5,000 1,648 5,000 5,000 5,000 5,500 5,500 6,000 6,000 6,000 6,000 6,500 6,500 6,500 10-41-295 Meals and Entertainment 7,802 8,000 3,563 8,000 8,000 8,500 8,500 9,000 9,000 9,000 9,500 9,500 9,500 10,000 10,000 10-41-690 Miscellaneous Expense 2,552 8,000 (14,379)8,000 3,000 3,000 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 10-41-860 Grants and Aid to Agencies 1,000 0 4,155 4,155 0 0 0 0 0 0 0 0 0 0 0 10-41-861 Intergovernmental Agreements 9,000 9,000 4,500 9,000 9,000 9,450 10,500 11,025 11,576 12,155 12,763 13,401 14,071 14,775 15,513 10-41-862 Fraser/Winter Park Police Dept 406,188 432,000 338,350 406,020 450,000 472,500 496,125 520,931 546,978 574,327 603,043 633,195 664,855 698,098 733,003 10-41-863 Street Lighting and Signals 16,667 15,250 13,043 15,250 17,200 17,450 17,700 17,950 18,200 18,450 18,700 18,950 19,200 19,450 19,700 10-41-864 Special Events 10,000 10,000 12,500 12,500 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10-41-865 Grand County Dispatch 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-41-866 Wood Stove Rebates 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-41-867 Chamber of Commerce - IGA 72,764 68,114 28,717 75,775 74,940 75,107 75,273 75,440 75,606 75,606 75,606 75,606 75,773 76,605 76,605 10-41-868 Winter Shuttle - IGA 52,000 80,000 56,000 56,000 60,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 10-41-869 Summer Shuttle - IGA 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-41-870 Business Dist StreetScape 3,961 100,000 3,200 10,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10-41-871 Business Enhancement Programs 3,200 105,000 39,756 60,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 10-41-872 Improvement Awards-Business 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 614,857 874,353 510,740 700,500 735,435 764,302 791,470 817,717 846,308 874,486 904,560 935,600 968,846 1,004,375 1,040,269 ADMINISTRATION 10-45-110 Salaries 203,554 250,000 194,745 250,000 250,000 255,000 260,100 267,903 273,261 278,726 287,088 292,830 298,686 307,647 313,800 10-45-210 Health Insurance 33,918 35,000 35,070 42,100 47,152 52,810 59,147 66,245 74,195 83,098 93,070 104,238 116,747 130,756 146,447 10-45-220 FICA Tax 14,654 19,125 12,547 19,125 19,125 19,508 19,898 20,495 20,904 21,323 21,962 22,401 22,850 23,535 24,006 10-45-230 Retirement 7,789 10,000 6,630 7,700 10,000 10,200 10,404 10,716 10,930 11,149 11,484 11,713 11,947 12,306 12,552 10-45-250 Unemployment Tax 611 750 589 750 750 765 780 804 820 836 861 878 896 923 941 10-45-260 Workers Comp Claims 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-280 Training Programs 2,856 4,000 3,308 4,000 4,000 4,000 4,000 4,000 4,500 4,500 4,500 5,000 5,000 5,000 5,000 10-45-290 Travel, Meals and Lodging 10,097 5,000 6,125 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,500 10-45-295 Meals and Entertainment 1,447 3,500 482 3,500 3,500 3,500 4,000 4,000 4,000 4,000 4,500 4,500 4,500 4,500 4,500 10-45-305 Municipal Court Judge 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-310 Legal Fees 65,809 65,000 34,213 50,000 100,000 105,000 105,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 10-45-320 Audit Fees 11,595 22,672 12,221 12,225 22,672 15,000 15,600 16,224 16,873 17,548 18,250 18,980 19,739 20,529 21,350 10-45-330 Engineering Fees 1,924 10,000 3,519 6,000 10,000 10,000 10,500 10,500 10,500 11,000 11,000 11,000 11,500 11,500 11,500 10-45-360 Computers-Networks and Support 25,750 65,000 29,114 65,000 55,000 55,000 55,000 55,000 55,000 60,000 60,000 65,000 75,000 75,000 75,000 10-45-370 Other Professional Services 57,411 90,000 18,884 90,000 60,000 60,000 50,000 50,000 50,000 50,000 55,000 55,000 55,000 55,000 60,000 10-45-375 Reimbursable Prof Services 172,331 100,000 76,962 100,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 10-45-380 Janitorial Services 8,769 15,300 6,241 10,000 15,000 15,300 15,606 15,918 16,236 16,561 16,892 17,230 17,575 17,926 18,285 10-45-385 Treasurer's Fees 3,930 5,918 3,936 5,918 6,000 6,150 6,210 6,240 6,270 6,300 6,600 6,750 6,900 7,050 7,050 10-45-390 Abatement Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-395 Recording Fees 500 1,000 500 500 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 10-45-410 Bank Charges 640 1,000 484 800 1,000 1,000 1,200 1,200 1,200 1,200 1,500 1,500 1,500 1,500 1,500 10-45-420 Elections 919 5,000 0 5,000 10,000 10,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10-45-430 Insurance - All Departments 37,317 42,000 17,545 42,000 42,000 44,000 47,000 51,000 51,000 51,000 51,000 51,000 51,000 51,000 51,000 10-45-440 Advertising 713 2,500 98 500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 10-45-490 Professional Memberships 6,214 7,000 6,868 7,000 7,500 8,000 8,000 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 10-45-500 Operating Supplies 12,005 12,000 7,140 12,000 12,500 13,125 13,781 14,470 15,194 15,954 16,751 17,589 18,468 19,392 20,361 10-45-510 Equipment Purchase and Repair 11,476 15,750 3,304 15,750 15,750 16,538 17,364 18,233 19,144 20,101 21,107 22,162 23,270 24,433 25,655 10-45-550 Postage 988 2,000 1,126 1,600 2,000 2,000 2,500 2,500 2,500 2,500 3,000 3,000 3,000 3,000 3,000 Page 2 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 10-45-560 Utilities -Telephone 5,810 6,500 5,286 7,000 7,500 7,575 7,651 7,727 7,805 7,883 7,961 8,041 8,121 8,203 8,285 10-45-561 Utilities - Natural Gas 4,068 6,000 2,452 5,500 6,000 6,200 6,400 6,600 6,800 7,000 7,200 7,400 7,600 7,800 8,000 10-45-562 Utilities - Electricity 5,234 7,000 3,472 6,500 6,500 6,700 6,900 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 10-45-569 Utilities - Trash Removal 1,164 2,500 984 1,200 2,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 10-45-670 Prop Mgmt - 107 Eisenhower Dr 11,035 29,000 10,539 15,000 40,000 16,000 16,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 10-45-671 Prop Mgmt - 105 Fraser Ave 147 500 2,326 2,500 500 500 500 500 500 500 500 500 500 500 500 10-45-672 Prop Mgmt - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-673 Prop Mgmt - 153 Fraser Ave 24,558 20,000 3,744 10,000 20,000 50,000 22,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 10-45-674 Prop Mgmt - 200 Eisenhower Dr 1,208 1,000 29 150 500 500 500 500 500 500 500 500 500 500 500 10-45-675 Prop Mgmt - 216 Eisenhower Dr 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-676 Prop Mgmt - 400 Doc Susie Ave 882 500 111 500 500 500 500 500 500 500 500 500 500 500 500 10-45-690 Miscellaneous Expense 9,636 8,000 1,000 4,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 10-45-695 Bad Debt Write-Off 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-730 Capital Projects 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-740 Capital Purchases 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-45-810 Lease/Purchase - Principal 19,252 20,207 20,207 20,207 21,210 22,262 22,626 24,525 25,741 27,018 28,358 29,765 31,241 32,790 34,416 10-45-820 Lease/Purchase - Interest 19,122 18,167 18,167 18,167 17,165 16,113 15,009 13,850 12,633 11,357 10,017 8,610 7,134 5,585 3,358 Sub-Total 795,333 908,889 549,967 849,192 884,824 904,745 880,677 858,750 876,106 899,654 928,701 955,188 988,274 1,015,975 1,047,106 PUBLIC WORKS 10-60-110 Salaries 357,480 410,296 307,228 385,000 420,000 428,400 436,968 445,707 459,079 468,260 477,625 491,954 501,793 511,829 527,184 10-60-210 Health Insurance 69,655 75,000 63,490 75,700 85,000 95,200 106,624 119,419 133,749 149,799 167,775 187,908 210,457 235,712 263,997 10-60-220 FICA Tax 25,379 31,388 22,256 28,000 32,130 32,773 33,428 34,097 35,120 35,822 36,538 37,634 38,387 39,155 40,330 10-60-230 Retirement 10,666 16,412 9,394 11,500 16,800 17,136 17,479 17,828 18,363 18,730 19,105 19,678 20,072 20,473 21,087 10-60-250 Unemployment Tax 1,072 1,231 929 1,155 1,260 1,285 1,311 1,337 1,377 1,405 1,433 1,476 1,505 1,535 1,582 10-60-260 Workers Comp Claims 190 0 371 500 0 0 0 0 0 0 0 0 0 0 0 10-60-280 Training Programs 990 2,000 804 2,000 2,000 2,000 2,500 2,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 10-60-290 Travel, Meals and Lodging 175 2,000 697 2,000 2,000 2,000 2,500 2,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 10-60-295 Meals and Entertainment 717 750 287 750 1,000 1,000 1,500 1,500 1,500 1,500 2,000 2,000 2,000 2,000 2,000 10-60-330 Engineering Fees 19,889 45,000 5,304 12,000 15,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 10-60-360 Computer Network Support 0 2,000 1,420 2,000 2,000 2,500 2,500 3,000 3,000 3,000 3,500 3,500 3,500 4,000 4,000 10-60-370 Other Professional Services 2,686 2,500 3,678 5,000 3,000 3,000 4,000 4,000 4,000 5,000 5,000 5,000 6,000 6,000 6,000 10-60-380 Janitorial Services 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-470 Contract Grounds Maintenance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-475 Contract Snow Removal 440 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-480 Equipment Rental 370 2,500 0 500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 10-60-490 Professional Memberships 850 750 441 750 750 750 900 900 900 900 1,000 1,000 1,000 1,000 1,000 10-60-500 Operating Supplies 77,360 75,000 46,782 75,000 80,000 85,000 88,000 90,000 87,000 87,000 90,000 90,000 95,000 95,000 100,000 10-60-506 Plants/Planter Supplies 9,722 12,000 9,457 12,000 15,000 15,000 15,000 20,000 20,000 20,000 22,000 22,000 22,000 25,000 25,000 10-60-510 Equipment Purchase and Repair 36,294 35,000 42,435 50,000 50,000 50,000 55,000 55,000 55,000 55,000 55,000 60,000 60,000 60,000 65,000 10-60-560 Utilities - Telephone 1,905 2,700 2,897 3,600 4,200 4,284 4,370 4,457 4,546 4,637 4,730 4,824 4,921 5,019 5,120 10-60-561 Utilities - Natural Gas 4,881 6,000 3,531 5,500 6,000 6,500 7,000 7,500 8,000 8,500 9,000 9,500 10,000 10,500 11,000 10-60-562 Utilities - Electricity 1,898 3,000 1,218 2,500 3,000 3,000 3,250 3,500 3,750 4,000 4,250 4,500 4,750 5,000 5,250 10-60-569 Utilities - Trash Removal 1,499 2,100 1,635 2,100 2,500 2,550 2,601 2,653 2,706 2,760 2,815 2,872 2,929 2,988 3,047 10-60-670 Prop Mgmt - 125 Fraser Ave 3,068 5,000 462 8,000 5,000 5,000 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 10-60-671 Prop Mgmt - Clayton Ct Parcel 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-672 Prop Mgmt - Elk Crk Wetlands 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-673 Prop Mgmt - Fraser River Trail 1,607 13,000 9,758 13,000 20,000 23,000 23,000 23,000 23,690 24,401 25,133 25,887 26,663 27,463 28,287 10-60-674 Prop Mgmt - Hwy 40 Pedestrian 131 18,000 0 0 25,000 5,000 5,000 5,000 20,000 7,000 7,000 50,000 8,000 8,000 20,000 10-60-675 Prop Mgmt - Koppers Park 0 0 1,477 2,000 0 0 0 0 0 0 0 0 0 0 0 10-60-676 Prop Mgmt - Old SchlHouse Pk 3,370 5,000 895 2,500 5,000 1,000 1,000 1,000 5,000 1,500 1,500 1,500 10,000 2,000 2,000 10-60-677 Prop Mgmt - Planning Area 28 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-678 Prop Mgmt - OutdoorActivityCtr 0 0 51 100 0 0 0 0 0 0 0 0 0 0 0 10-60-679 Prop Mgmt - School Bus Garage 4,657 7,000 3,047 7,000 7,000 7,500 7,500 8,000 8,000 8,500 8,500 8,500 9,000 9,000 9,000 10-60-680 Prop Mgmt - Gardner Shed 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Page 3 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 10-60-681 Prop Mgmt - Cozens Ranch Park 27,871 230,000 141,345 230,000 12,000 15,000 15,300 15,606 15,918 16,236 16,561 16,892 17,230 17,575 17,926 10-60-682 Prop Mgmt - Amtrak Station 288 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-683 Prop Mgmt - Ptarmigan OS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-684 Prop Mgmt - FRODO 0 5,000 0 0 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10-60-685 Prop Mgmt - Mtn Man Park 0 500 700 1,000 500 500 5,000 500 500 500 500 5,000 500 500 500 10-60-686 Goranson Station 33,096 1,500 1,248 1,500 500 2,000 500 500 500 750 750 750 1,000 1,000 1,000 10-60-690 Miscellaneous Expense 2,448 1,500 1,411 2,000 3,000 3,200 3,400 3,600 3,800 4,000 4,200 4,400 4,600 4,800 5,000 10-60-695 Fraser Mustang 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-60-725 Street Improvements 36,369 285,000 17,350 285,000 325,000 331,500 338,130 344,893 351,790 358,826 366,003 373,323 380,789 388,405 396,173 10-60-730 Capital Projects 0 10,000 0 0 0 0 500,000 500,000 0 0 0 0 0 0 0 10-60-740 Capital Purchases 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 737,024 1,309,127 701,998 1,229,655 1,152,140 1,173,578 1,716,760 1,750,997 1,306,288 1,327,027 1,370,919 1,469,099 1,481,097 1,522,955 1,600,483 Outdoor Activity Center 10-65-110 Salaries 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-210 Health Insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-220 FICA Tax 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-230 Retirement 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-250 Unemployment Tax 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-260 Workers Comp Claims 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-280 Training Programs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-290 Travel, Meals and Lodging 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-295 Meals and Entertainment 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-370 Other Professional Services 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-380 Janitorial Services 5,275 5,610 3,900 5,610 6,000 6,120 6,242 6,367 6,495 6,624 6,757 6,892 7,030 7,171 7,314 10-65-490 Professional Memberships 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-500 Operating Supplies 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-510 Equipment Purchase and Repair 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-560 Utilities - Telephone 458 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-561 Utilities - Natural Gas 1,120 1,515 723 1,250 1,530 1,545 1,561 1,577 1,592 1,608 1,624 1,641 1,657 1,674 1,690 10-65-562 Utilities - Electricity 867 1,010 537 900 1,020 1,030 1,041 1,051 1,062 1,072 1,083 1,094 1,105 1,116 1,127 10-65-665 WTHP Expenses 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-670 Prop Mgmt - 120 Zerex 8,767 5,000 207 1,500 5,000 10,000 5,000 10,000 5,000 5,000 10,000 6,000 6,000 10,000 7,000 10-65-690 Miscellaneous Expense 81 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-730 Capital Projects 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-65-740 Capital Purchases 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 16,567 13,135 5,367 9,260 13,550 18,696 13,844 18,995 14,148 14,305 19,464 15,626 15,792 19,960 17,131 TRANSFERS 10-90-920 Transfer to CERF - Police Dept 0 0 0 0 50,000 0 50,000 50,000 0 50,000 0 50,000 0 50,000 50,000 10-90-930 Transfer to CERF - PublicWorks 0 0 0 0 60,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 10-90-935 Transfer to CAF 0 50,000 50,000 50,000 0 0 0 0 0 0 0 0 0 0 0 10-90-940 Transfer to Debt Service Fund 247,373 246,550 246,550 246,550 284,695 255,000 208,000 0 0 0 0 0 0 0 0 10-90-950 Transfer to Water Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-90-960 Transfer to FREP 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-90-970 Transfer to Committed Reserves 0 0 0 250,000 0 0 0 0 0 0 0 0 0 0 0 10-90-980 Transfer to Petersen Trust 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-90-995 Salaries Clearing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-90-996 FICA Tax Clearing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-90-997 Unemployment Tax Clearing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 247,373 296,550 296,550 546,550 394,695 305,000 308,000 100,000 50,000 100,000 50,000 100,000 50,000 100,000 100,000 FISCAL AGENT 10-95-110 Salaries 0 0 6,609 0 0 0 0 0 0 0 0 0 0 0 0 Page 4 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 10-95-210 Health Insurance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10-95-220 FICA Tax 0 0 492 0 0 0 0 0 0 0 0 0 0 0 0 10-95-230 Retirement 0 0 196 0 0 0 0 0 0 0 0 0 0 0 0 10-95-250 Unemployment Tax 0 0 20 0 0 0 0 0 0 0 0 0 0 0 0 10-95-260 Workers Comp Claims 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 7,318 0 0 0 0 0 0 0 0 0 0 0 0 GENERAL FUND EXPENDITURE TOTALS 2,411,154 3,402,053 2,071,940 3,335,157 3,180,644 3,166,320 3,710,751 3,546,459 3,092,851 3,215,471 3,273,644 3,475,513 3,504,010 3,663,264 3,804,989 GENERAL FUND REVENUE TOTALS 4,557,299 4,345,578 3,922,643 4,984,560 4,048,803 3,266,009 2,504,689 1,206,538 84,779 580,922 196,649 633,095 387,518 631,091 546,273 GENERAL FUND NEW REVENUE TOTALS 2,548,189 2,341,965 1,806,499 2,858,415 2,399,400 2,397,850 2,405,000 2,412,600 2,424,700 2,427,150 2,437,900 2,443,900 2,454,900 2,485,400 2,485,900 GENERAL FUND EXPENDITURE TOTALS 2,411,154 3,402,053 2,071,940 3,335,157 3,180,644 3,166,320 3,710,751 3,546,459 3,092,851 3,215,471 3,273,644 3,475,513 3,504,010 3,663,264 3,804,989 GENERAL FUND REVENUE OVER EXPENDITURES 2,146,145 943,525 1,850,703 1,649,403 868,159 99,689 (1,206,062)(2,339,921)(3,008,072)(2,634,549)(3,076,995)(2,842,418)(3,116,491)(3,032,173)(3,258,716) GENERAL FUND EXPENDITURE OVER NEW REVENUES 137,035 (1,060,088)(265,442)(476,742)(781,244)(768,470)(1,305,751)(1,133,859)(668,151)(788,321)(835,744)(1,031,613)(1,049,110)(1,177,864)(1,319,089) GF Restricted Reserves - Tabor Emergency Reserve 110,000 110,000 GF Restricted Reserves - Affordable Housing Reserve 135,426 135,426 GF Restricted Reserves - Fees in Lieu of P&OS Reserve 6,379 6,379 GF Committed Emergency Reserve 750,000 1,000,000 GF Unassigned Fund Balance 1,649,403 868,159 99,689 (1,206,062)(2,339,921)(3,008,072)(2,634,549)(3,076,995)(2,842,418)(3,116,491)(3,032,173)(3,258,716) Page 5 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget CONSERVATION TRUST FUND REVENUE 20-30-100 Cons Trust (Lottery) Proceeds 15,595 6,500 2,900 6,500 6,500 6,600 6,700 6,800 6,900 7,000 7,100 7,200 7,300 7,400 7,400 20-30-800 Interest Earnings 7 15 10 15 15 20 25 30 30 30 30 30 30 30 30 20-30-999 Unassigned Fund Balance 893 6,899 16,495 16,495 13,010 19,525 26,145 32,870 39,700 46,630 53,660 60,790 68,020 75,350 82,780 Sub-Total 16,495 13,414 19,406 23,010 19,525 26,145 32,870 39,700 46,630 53,660 60,790 68,020 75,350 82,780 90,210 EXPENDITURES 20-40-410 Bank Charges 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20-40-650 Cons Trust Program Expenses 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20-40-910 Transfer to General Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20-40-920 Transfer to Other Funds 0 10,000 0 10,000 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 0 10,000 0 10,000 0 0 0 0 0 0 0 0 0 0 0 CTF REVENUES OVER EXPENDITURES 16,495 3,414 19,406 13,010 19,525 26,145 32,870 39,700 46,630 53,660 60,790 68,020 75,350 82,780 90,210 CAPITAL EQUIP REPLACEMENT FUND REVENUES 30-30-100 Hwy Use Tax Proceeds 44,896 45,039 25,930 45,039 45,039 45,490 45,945 46,404 46,868 47,337 47,810 48,288 48,771 49,259 49,752 30-30-500 Sale of CERF Assets 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30-30-800 Interest Earnings 549 300 381 485 350 300 250 200 (1,531)(2,169)(3,068)(3,720)(3,647)(3,921)(3,944) 30-30-900 Transfer from G/F - PoliceDept 0 0 0 0 50,000 0 50,000 50,000 0 50,000 0 50,000 0 50,000 50,000 30-30-910 Transfer from G/F - PublicWork 0 0 0 0 60,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 30-30-920 Transfer from Utility Funds 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 30-30-999 Unassigned Fund Balance 470,586 464,835 465,578 465,578 410,684 370,656 106,028 37,222 (306,174)(433,836)(613,668)(743,926)(729,358)(784,233)(788,895) Sub-Total 536,031 530,174 511,889 531,102 586,074 486,446 272,222 203,826 (190,836)(268,668)(498,926)(579,358)(614,233)(618,895)(623,088) EXPENDITURES 30-40-745 Public Safety Fleet Purchase 0 48,000 8,313 65,000 60,000 0 45,000 50,000 48,000 50,000 50,000 50,000 50,000 50,000 50,000 30-40-750 Regular Fleet Purchase 25,035 90,000 9,039 10,000 90,000 90,000 85,000 55,000 0 95,000 0 50,000 50,000 50,000 50,000 30-40-755 Heavy Equipment Purchase 0 20,000 0 0 20,000 245,000 105,000 405,000 195,000 200,000 195,000 50,000 70,000 70,000 70,000 30-40-810 Lease/Purchase - Principal 40,938 42,015 42,015 42,015 43,120 44,254 0 0 0 0 0 0 0 0 0 30-40-820 Lease/Purchase - Interest 4,480 3,403 3,403 3,403 2,298 1,164 0 0 0 0 0 0 0 0 0 30-40-910 Transfer to General Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 70,453 203,418 62,770 120,418 215,418 380,418 235,000 510,000 243,000 345,000 245,000 150,000 170,000 170,000 170,000 CERF REVENUES OVER EXPENDITURES 465,578 326,756 449,119 410,684 370,656 106,028 37,222 (306,174)(433,836)(613,668)(743,926)(729,358)(784,233)(788,895)(793,088) Page 6 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget CAPITAL ASSET FUND REVENUE 32-30-100 Reserved for Future Use 837,338 1,420,000 1,117,805 1,420,000 0 0 0 0 0 0 0 0 0 0 0 32-30-500 Sale of Capital Assets 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-30-800 Interest Earnings 511 250 779 850 0 0 0 0 0 0 0 0 0 0 0 32-30-910 Transfer in from General Fund 0 50,000 50,000 50,000 0 0 0 0 0 0 0 0 0 0 0 32-30-940 Transfer in from DSF 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-30-950 Transfer in from Water Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-30-999 Unassigned Fund Balance 6,218 667,788 671,471 671,471 200 200 200 200 200 200 200 200 200 200 200 Sub-Total 844,067 2,138,038 1,840,054 2,142,321 200 200 200 200 200 200 200 200 200 200 200 EXPENDITURES 32-40-810 Capital Proj- Streets Existing 6,218 0 0 4,083 0 0 0 0 0 0 0 0 0 0 0 32-40-815 Capital Proj - Streets New 166,378 2,138,038 1,982,616 2,138,038 0 0 0 0 0 0 0 0 0 0 0 32-40-820 Capital Proj - Buildings Exist 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-825 Capital Proj - Buildings New 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-830 Capital Proj - Parks/OS Exist 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-835 Capital Proj - Parks/OS New 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-900 Transfer to General Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-910 Transfer to CAF Res - Streets 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-920 Transfer to CAF Res - Bldgs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32-40-930 Transfer to CAF Res - Parks/OS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 172,596 2,138,038 1,982,616 2,142,121 0 0 0 0 0 0 0 0 0 0 0 CAF REVENUES OVER EXPENDITURES 671,471 0 (142,561)200 200 200 200 200 200 200 200 200 200 200 200 Page 7 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget DEBT SERVICE FUND REVENUE 40-30-100 Property Tax 80,243 80,000 79,737 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 40-30-200 Specific Ownership Tax 4,327 3,000 3,485 4,000 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 40-30-500 Bond Proceeds 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40-30-800 Interest Earnings 592 250 551 600 250 250 250 250 250 250 250 250 250 250 250 40-30-910 Transfer in from General Fund 247,373 246,550 246,550 246,550 284,695 128,348 0 0 0 0 0 0 0 0 0 40-30-990 Transfer in from DSF Reserves 0 0 0 0 0 300,000 0 0 0 0 0 0 0 0 0 40-30-999 Carryover Balance 0 0 0 0 0 500 0 83,750 167,500 251,250 335,000 418,750 502,500 586,250 670,000 Sub-Total 332,535 329,800 330,323 331,150 368,445 512,598 83,750 167,500 251,250 335,000 418,750 502,500 586,250 670,000 753,750 EXPENDITURES 40-40-385 Treasurer's Fees GO Bond 1,605 2,000 1,595 2,000 2,000 2,000 0 0 0 0 0 0 0 0 0 40-40-390 Abatements - GO Bond 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40-40-500 Cost of Issuance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40-40-550 Underwriters Discount 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40-40-810 Bond Principal - 02 S&U Issue 25,000 25,000 25,000 25,000 30,000 60,000 0 0 0 0 0 0 0 0 0 40-40-811 Bond Principal - 98 GO Issue 40,000 45,000 0 45,000 45,000 50,000 0 0 0 0 0 0 0 0 0 40-40-812 Bond Principal - 98 S&U Issue 170,000 180,000 180,000 180,000 195,000 380,000 0 0 0 0 0 0 0 0 0 40-40-820 Bond Interest - 02 S&U Issue 7,013 5,638 3,163 5,638 4,125 1,650 0 0 0 0 0 0 0 0 0 40-40-821 Bond Interest - 98 GO Issue 9,675 7,526 3,763 7,526 5,106 2,688 0 0 0 0 0 0 0 0 0 40-40-822 Bond Interest - 98 S&U Issue 45,360 35,910 20,385 35,910 25,785 10,260 0 0 0 0 0 0 0 0 0 40-40-850 Bond Agent Fees 2,340 3,000 750 3,000 4,000 5,000 0 0 0 0 0 0 0 0 0 40-40-910 Transfer to DSF Reserves 0 25,726 0 27,076 56,929 0 0 0 0 0 0 0 0 0 0 40-40-920 Transfer to Other Funds 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 300,992 329,800 234,655 331,150 367,945 511,598 0 0 0 0 0 0 0 0 0 DEBT SERVICE REVENUES 332,535 329,800 330,323 331,150 368,445 512,598 83,750 167,500 251,250 335,000 418,750 502,500 586,250 670,000 753,750 DEBT SERVICE EXPENDITURES 300,992 329,800 234,655 331,150 367,945 511,598 0 0 0 0 0 0 0 0 0 DEBT SERVICE REVENUES OVER EXPENDITURES 31,543 0 95,668 0 500 1,000 83,750 167,500 251,250 335,000 418,750 502,500 586,250 670,000 753,750 Debt Service Fund Restricted Reserves 300,000 300,000 0 Debt Service Fund Committed Reserves 245,941 273,017 144,669 83,750 167,500 251,250 335,000 418,750 502,500 586,250 670,000 753,750 Page 8 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget WATER FUND REVENUES TAXES 50-31-100 Property Tax 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-31-200 Fraser Firming Revenue 50,387 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 50,387 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LICENSES & PERMITS 50-32-100 Excavation Permit Fees 275 275 275 275 275 275 275 275 275 275 275 275 275 275 275 Sub-Total 275 275 275 275 275 275 275 275 275 275 275 275 275 275 275 CHARGES FOR SERVICES 50-34-100 Customer Service Charges 720,687 760,040 587,142 778,500 780,000 788,300 796,683 805,150 829,804 855,198 881,354 908,295 936,044 964,625 994,064 50-34-150 Penalties & Interest 2,352 1,000 2,218 2,500 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 50-34-200 Plant Investment Fees 0 15,400 15,400 15,400 7,700 7,700 15,400 7,700 7,700 15,400 15,400 7,700 7,700 15,400 15,400 50-34-300 Water Meter Sales 14,890 2,000 34,169 38,000 5,000 5,000 2,000 1,000 1,000 2,000 2,000 1,000 1,000 2,000 2,000 Sub-Total 737,930 778,440 638,928 834,400 793,700 802,000 815,083 814,850 839,504 873,598 899,754 917,995 945,744 983,025 1,012,464 MISCELLANEOUS REVENUE 50-36-100 Interest Earnings 1,153 800 1,143 1,500 800 150 300 600 900 1,500 1,500 1,500 1,500 1,500 1,500 50-36-900 Miscellaneous Revenue 4,289 2,500 3,041 3,100 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Sub-Total 5,442 3,300 4,184 4,600 3,300 2,650 2,800 3,100 3,400 4,000 4,000 4,000 4,000 4,000 4,000 OTHER SOURCES & TRANSFERS 50-39-100 Debt Service Proceeds 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-39-200 Grants and Aid from Agencies 0 25,000 50,000 50,000 0 0 0 0 0 0 0 0 0 0 0 50-39-910 Transfers In 0 50,000 0 0 0 0 0 0 0 0 0 0 0 0 0 50-39-999 Unassigned Fund Balance 573,820 720,401 766,652 766,652 1,011,389 144,412 (3,263,141)(3,592,603)(4,034,935)(4,198,879)(4,223,169)(4,251,920)(4,306,486)(4,360,922)(4,403,393) Sub-Total 573,820 795,401 816,652 816,652 1,011,389 144,412 (3,263,141)(3,592,603)(4,034,935)(4,198,879)(4,223,169)(4,251,920)(4,306,486)(4,360,922)(4,403,393) New Revenues 794,034 857,015 643,388 889,275 797,275 804,925 818,158 818,225 843,179 877,873 904,029 922,270 950,019 987,300 1,016,739 Total Revenue with Carryover 1,367,854 1,577,416 1,460,040 1,655,927 1,808,664 949,337 (2,444,983)(2,774,378)(3,191,755)(3,321,005)(3,319,140)(3,329,650)(3,356,467)(3,373,621)(3,386,654) EXPENTITURES 50-40-110 Salaries 148,454 185,000 146,554 185,000 195,000 204,750 214,988 225,737 237,024 248,875 261,319 274,385 288,104 302,509 317,634 50-40-210 Health Insurance 22,117 26,000 21,323 26,000 29,250 32,760 36,691 41,094 46,025 51,548 57,734 64,662 72,422 81,113 90,846 50-40-220 FICA Tax 10,801 14,153 10,853 14,153 14,918 15,663 16,447 17,269 18,132 19,039 19,991 20,990 22,040 23,142 24,299 50-40-230 Retirement 4,252 6,500 4,837 6,500 6,500 8,190 8,600 9,029 9,481 9,955 10,453 10,975 11,524 12,100 12,705 50-40-250 Unemployment Tax 438 555 441 555 585 614 645 677 711 747 784 823 864 908 953 50-40-260 Workers Comp Claims 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-280 Training Programs 400 3,000 359 1,000 3,000 3,000 3,000 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 50-40-290 Travel, Meals and Lodging 58 3,000 100 1,000 3,000 3,000 3,000 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 50-40-295 Meals and Entertainment 1,121 2,000 81 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 50-40-300 Administrative Reimbursement 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-310 Legal Fees 64,876 75,000 46,608 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 50-40-330 Engineering Fees 16,781 10,000 13,856 18,000 60,000 15,000 15,000 15,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 50-40-360 Computers-Networks and Support 8,409 6,000 4,993 6,000 6,000 6,500 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 50-40-370 Other Professional Services 22,351 5,000 422 5,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 50-40-385 Treasurer's Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-390 Abatements 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-410 Bank Charges 28 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-430 Insurance 14,584 20,000 17,084 17,100 20,000 25,000 25,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 Page 9 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 50-40-440 Advertising 46 500 241 250 500 500 500 500 500 500 500 500 500 500 500 50-40-460 System Repair and Maint - Prod 9,051 75,000 4,747 10,000 79,000 40,000 30,000 30,000 136,000 65,000 70,000 75,000 75,000 75,000 75,000 50-40-465 System Repair and Maint - Dist 16,984 70,000 7,419 55,000 25,000 22,000 28,000 25,000 40,000 50,000 55,000 60,000 60,000 60,000 60,000 50-40-490 Professional Memberships 9,070 8,000 8,420 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 10,000 10,000 10,000 10,000 50-40-500 Operating Supplies-Production 14,042 35,000 7,781 12,000 35,000 35,000 40,000 40,000 45,000 45,000 45,000 50,000 50,000 50,000 50,000 50-40-505 Operating Supplies-Distrib 17,974 25,000 32,476 40,000 40,000 35,000 35,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 50-40-510 Equipment Purchase and Repair 2,006 10,000 30,997 40,000 30,000 25,000 25,000 25,000 30,000 30,000 30,000 35,000 35,000 35,000 35,000 50-40-520 Testing 3,225 10,000 968 1,500 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 50-40-550 Postage & Billing Supplies 1,527 2,500 750 2,500 2,500 2,500 2,500 3,000 3,000 3,000 3,500 3,500 3,500 4,000 4,000 50-40-560 Utilities - Telephone 2,889 3,500 3,616 3,980 4,500 4,500 4,750 4,750 4,750 5,000 5,000 5,000 5,500 5,500 5,500 50-40-562 Utilities - Electricity 32,675 55,000 21,823 32,500 50,000 50,000 50,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 50-40-670 Prop Mgmt - Fraser WTP 43 3,000 1,033 2,000 3,000 10,000 4,000 10,000 5,000 5,000 5,000 6,000 8,000 8,000 8,000 50-40-680 Prop Mgmt - Maryvale WTP 45 3,000 427 1,000 3,000 5,000 4,000 8,000 5,000 5,000 5,000 6,000 8,000 8,000 8,000 50-40-685 Prop Mgmt - St. Louis Headgate 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-690 Miscellaneous Expense 548 2,000 9 1,000 2,000 2,000 2,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 50-40-695 Bad Debt Write Off 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-715 Water Rights - Diversion & Dev 7,266 15,000 6,482 15,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 50-40-730 Capital Projects 17,262 204,000 33,658 45,000 250,000 465,000 440,000 512,000 113,000 50,000 50,000 50,000 50,000 50,000 50,000 50-40-740 Capital Purchases 0 0 0 0 0 3,000,000 0 0 0 0 0 0 0 0 0 50-40-760 Fraser Firming - CapProj 41,872 680,000 15,856 16,000 650,000 50,000 0 0 0 0 0 0 0 0 0 50-40-770 PIF - Capital Purchases 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-780 Capitalized Assets - Audit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-790 Depreciation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-810 Debt Service - Principal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-820 Debt Service - Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-850 Debt Service - Agent Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-910 Transfer to General Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-930 Transfer to CERF 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 50-40-970 Transfer to Reserves 100,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-980 Transfer to Metro Districts 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 50-40-990 Transfer to Wastewater Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 601,195 1,567,708 454,216 644,538 1,664,253 4,212,478 1,147,620 1,260,557 1,007,123 902,164 932,781 976,836 1,004,454 1,029,771 1,056,438 WATER FUND REVENUES 1,367,854 1,577,416 1,460,040 1,655,927 1,808,664 949,337 (2,444,983)(2,774,378)(3,191,755)(3,321,005)(3,319,140)(3,329,650)(3,356,467)(3,373,621)(3,386,654) WATER FUND EXPENDITURES 601,195 1,567,708 454,216 644,538 1,664,253 4,212,478 1,147,620 1,260,557 1,007,123 902,164 932,781 976,836 1,004,454 1,029,771 1,056,438 WATER FUND REVENUES OVER EXPENDITURES 766,660 9,709 1,005,824 1,011,389 144,412 (3,263,141)(3,592,603)(4,034,935)(4,198,879)(4,223,169)(4,251,920)(4,306,486)(4,360,922)(4,403,393)(4,443,092) Water Fund Committed Reserve 460,000 460,000 460,000 Water Fund Unassigned Reserve 852,389 144,412 (3,263,141)(3,592,603)(4,034,935)(4,198,879)(4,223,169)(4,251,920)(4,306,486)(4,360,922)(4,403,393)(4,443,092) Page 10 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget WASTEWATER FUND REVENUES TAXES 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Property Tax Specific Ownership Tax Sub-Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LICENSES & PERMITS 55-32-100 Excavation Permit Fees 325 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 325 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CHARGES FOR SERVICES 55-34-100 Customer Service Charges 678,763 637,184 479,324 638,000 637,184 638,184 639,184 640,184 640,184 640,184 640,184 640,184 640,184 640,184 640,184 55-34-150 Penalties & Interest 2,136 1,000 2,068 2,500 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 55-34-200 Plant Investment Fees 120,000 15,000 255,000 292,500 100,000 75,000 82,000 82,000 82,000 82,000 82,000 82,000 82,000 82,000 82,000 55-34-999 Contributed Assets 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 800,899 653,184 736,391 933,000 738,184 714,184 722,184 723,184 723,184 723,184 723,184 723,184 723,184 723,184 723,184 MISCELLANEOUS REVENUE 55-36-100 Interest Earnings 8,922 3,000 2,875 3,830 3,200 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 55-36-500 JFF Management Fee 29,000 29,000 21,750 29,000 29,000 29,000 29,000 29,000 29,000 29,000 29,000 29,000 29,000 29,000 29,000 55-36-900 Miscellaneous Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 37,922 32,000 24,625 32,830 32,200 32,700 32,700 32,700 32,700 32,700 32,700 32,700 32,700 32,700 32,700 OTHER SOURCES & TRANSFERS 55-39-100 Debt Service Proceeds 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-39-200 Grants and Aid from Agencies 0 0 0 57,500 57,500 0 0 0 0 0 0 0 0 0 0 55-39-910 Transfer in from General Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-39-999 Unassigned Fund Balance 2,699,802 2,968,217 3,011,956 3,011,956 3,339,978 3,287,619 2,115,924 2,044,082 2,053,498 2,065,488 2,052,771 1,753,959 1,432,545 1,236,894 1,115,227 Sub-Total 2,699,802 2,968,217 3,011,956 3,069,456 3,397,478 3,287,619 2,115,924 2,044,082 2,053,498 2,065,488 2,052,771 1,753,959 1,432,545 1,236,894 1,115,227 new revenues 839,146 685,184 761,016 965,830 770,384 746,884 754,884 755,884 755,884 755,884 755,884 755,884 755,884 755,884 755,884 total revenues with carryover 3,538,948 3,653,401 3,772,972 4,035,286 4,167,862 4,034,503 2,870,808 2,799,966 2,809,382 2,821,372 2,808,655 2,509,843 2,188,429 1,992,778 1,871,111 EXPENDITURES 55-40-110 Salaries 178,509 195,000 149,772 195,000 205,000 215,250 226,013 237,313 249,179 261,638 274,720 288,456 302,878 318,022 333,923 55-40-210 Health Insurance 26,244 28,000 21,688 27,000 30,500 34,160 38,259 42,850 47,992 53,751 60,202 67,426 75,517 84,579 94,728 55-40-220 FICA Tax 13,290 14,918 11,094 14,918 15,683 16,467 17,290 18,154 19,062 20,015 21,016 22,067 23,170 24,329 25,545 55-40-230 Retirement 5,600 7,000 4,974 6,500 7,000 8,610 9,041 9,493 9,967 10,466 10,989 11,538 12,115 12,721 13,357 55-40-250 Unemployment Tax 534 585 451 585 615 646 678 712 748 785 824 865 909 954 1,002 55-40-260 Workers Comp Claims 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-280 Training Programs 0 2,500 200 1,000 2,500 2,500 2,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 55-40-290 Travel, Meals and Lodging 0 2,500 20 1,000 2,500 2,500 2,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 55-40-295 Meals and Entertainment 1,103 1,000 68 1,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 55-40-310 Legal Fees 22,814 15,000 693 1,500 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 55-40-330 Engineering Fees 2,703 10,000 3,889 6,000 5,000 5,000 5,000 5,000 5,000 5,000 20,000 20,000 20,000 20,000 20,000 55-40-360 Computers-Networks and Support 6,839 6,000 3,905 6,000 6,000 6,500 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 55-40-370 Other Professional Services 21,037 10,000 376 1,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Page 11 of 12 10/15/2015 2014 2015 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actuals Budget Year to Date YEE Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget 55-40-410 Bank Charges 0 100 0 0 100 100 100 100 100 100 100 100 100 100 100 55-40-430 Insurance 5,860 6,500 4,405 4,405 6,500 6,500 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 55-40-440 Advertising 0 500 93 150 500 500 500 500 500 500 500 500 500 500 500 55-40-460 System Repair and Maint-Collec 50,694 130,000 74,564 85,000 118,000 35,000 80,000 75,000 60,000 65,000 65,000 65,000 65,000 65,000 65,000 55-40-490 Professional Memberships 1,602 6,000 55 250 2,000 2,000 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 55-40-500 Operating Supplies-Collections 580 5,000 247 1,000 5,000 5,000 5,000 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 55-40-510 Equipment Purchase and Repair 618 5,000 280 5,000 5,000 5,000 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 55-40-520 Testing 0 1,000 0 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 55-40-550 Postage & Billing Supplies 1,497 3,000 750 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 55-40-560 Utilities - Telephone 254 500 1,415 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 55-40-650 WW Treatment Charges/JFOC 154,032 209,833 113,017 190,000 185,846 195,846 200,846 200,846 200,846 200,846 200,846 200,846 200,846 200,846 200,846 55-40-660 JFF CapRepl Reserve 13,206 0 0 0 0 1,300,000 150,000 0 0 0 250,000 250,000 100,000 0 0 55-40-670 JFF O&M Reserve 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-690 Miscellaneous Expense 188 3,000 0 3,000 3,000 3,000 3,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 55-40-695 Bad Debt Write Off 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-730 Capital Projects 0 370,000 2,826 130,000 246,500 41,000 31,000 86,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 55-40-740 Capital Purchases 17,187 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-760 PIF - Capital Projects 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-770 PIF - Capital Purchases 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-780 Capitalized Assets - Audit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-790 Depreciation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-810 Debt Service - Principal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-820 Debt Service - Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-850 Debt Service - Agent Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-910 Transfer to General Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-930 Transfer to CERF 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 55-40-970 Transfer to Reserves 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 55-40-990 Transfer to Water Fund 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sub-Total 534,392 1,042,936 404,783 695,308 880,244 1,918,578 826,726 746,468 743,894 768,601 1,054,696 1,077,298 951,535 877,551 905,502 WASTEWATER FUND REVENUES 3,538,948 3,653,401 3,772,972 4,035,286 4,167,862 4,034,503 2,870,808 2,799,966 2,809,382 2,821,372 2,808,655 2,509,843 2,188,429 1,992,778 1,871,111 WASTEWATER FUND EXPENDITURES 534,392 1,042,936 404,783 695,308 880,244 1,918,578 826,726 746,468 743,894 768,601 1,054,696 1,077,298 951,535 877,551 905,502 WASTEWATER FUND REVENUES OVER EXPENDITURES 3,004,556 2,610,466 3,368,190 3,339,978 3,287,619 2,115,924 2,044,082 2,053,498 2,065,488 2,052,771 1,753,959 1,432,545 1,236,894 1,115,227 965,609 Wastewater Fund Committed Fund Balance 2,000,000 2,000,000 2,000,000 Wastewater Fund Unassigned Fund Balance 1,260,260 1,260,260 62,466 Page 12 of 12 ! ! ! ! ! ! ! ! September(2015( ! ! ! ! ! ! ! ! ! Prepared'by:' ' Wendy'Sullivan,'WSW'Consulting' San'Anselmo,'CA' wendy@wswconsult.com' ' ' Melanie'Rees,'Rees'Consulting,'Inc.' Crested'Butte,'CO' melanie@reesconsultinginc.com' Town'of'Winter'Park' Housing'Needs'Assessment' ! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!TOC! TABLE&OF&CONTENTS& INTRODUCTION&.......................................................................................................................&1! PURPOSE!.......................................................................................................................................!1! METHODOLOGY!..............................................................................................................................!1! SECONDARY!DATA!SOURCES!..............................................................................................................!2! WHAT!IS!ATTAINABLE!HOUSING!IN!WINTER!PARK?!...............................................................................!2! ACKNOWLEDGEMENTS!.....................................................................................................................!3! CONCLUSIONS&–&HOUSING&PROBLEMS,&OPPORTUNITIES&AND&STRATEGIES&..............................&4! HOUSING!PROBLEMS!.......................................................................................................................!4! OPPORTUNITIES!AND!RESOURCES!.......................................................................................................!6! HOUSING!NEEDS!.............................................................................................................................!7! STRATEGY!RECOMMENDATIONS!.........................................................................................................!8! SECTION&1&5&DEMOGRAPHICS&..................................................................................................&15! POPULATION!AND!HOUSEHOLDS!......................................................................................................!15! POPULATION!AND!HOUSEHOLD!CHARACTERISTICS!...............................................................................!16! INCOME!.......................................................................................................................................!18! SECTION&2&–&HOUSING&INVENTORY&.........................................................................................&20! HOUSING!UNITS!–!NUMBER!AND!OCCUPANCY!...................................................................................!20! TYPES!OF!UNITS!............................................................................................................................!21! OWNERSHIP!.................................................................................................................................!21! HOME!VALUES!..............................................................................................................................!22! BEDROOM!MIX!.............................................................................................................................!23! AGE!OF!UNITS!..............................................................................................................................!24! OWNER/RENTER!MIX!....................................................................................................................!24! ATTAINABLE!HOUSING!...................................................................................................................!25! EMPLOYER!ASSISTED!HOUSING!(EAH)!..............................................................................................!26! LOSS!OF!EMPLOYEE!HOUSING!..........................................................................................................!27! PLANNED/PENDING/POTENTIAL!DEVELOPMENT!.................................................................................!27! SECTION&3&–&ECONOMIC&CONDITIONS&AND&TRENDS&...............................................................&30! NUMBER!OF!JOBS!..........................................................................................................................!30! SEASONALITY!OF!JOBS!....................................................................................................................!30! JOBS!AND!WAGES!BY!SECTOR!..........................................................................................................!32! LABOR!FORCE!AND!UNEMPLOYMENT!................................................................................................!33! COMMUTING!................................................................................................................................!34! JOBS!PER!EMPLOYEE!AND!EMPLOYEES!PER!HOUSEHOLD!......................................................................!34! EMPLOYERS,!EMPLOYEES!AND!HOUSING!...........................................................................................!35! SECTION&4&–&HOMEOWNERSHIP&MARKET&CONDITIONS&..........................................................&37! TRENDS!.......................................................................................................................................!37! AVAILABILITY!–!HOMES!LISTED!FOR!SALE!...........................................................................................!38! HOME!PRICES!AND!ATTAINABILITY!...................................................................................................!40! OWNERSHIP!OPPORTUNITIES!FOR!THE!WORKFORCE!............................................................................!41! DEED!RESTRICTED!SALES!.................................................................................................................!42! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!TOC! BUYER!PROFILE!.............................................................................................................................!43! LOCAL!BUYER!PREFERENCES!............................................................................................................!45! DOWNVALLEY!CONDITIONS!.............................................................................................................!45! MORTGAGE!AVAILABILITY!...............................................................................................................!46! SECTION&5&–&RENTAL&MARKET&CONDITIONS&............................................................................&47! RENTAL!INVENTORY!.......................................................................................................................!47! AGE/CONDITION!OF!UNITS!.............................................................................................................!47! VACANCY!RATES!...........................................................................................................................!48! RENTS!.........................................................................................................................................!49! OCCUPANCY!TRENDS!AND!RENTER!CHARACTERISTICS!..........................................................................!50! AVAILABILITY!–!UNITS!LISTED!FOR!RENT!............................................................................................!51! COMPETITION!FOR!LOCAL!RENTALS!..................................................................................................!52! RENTER!PREFERENCES!AND!NEEDS!...................................................................................................!52! SECTION&6&–&HOUSING&NEEDS&AND&PREFERENCES&...................................................................&54! CURRENT!CONDITIONS!AND!NEEDS!..................................................................................................!54! FUTURE!(KEEPDUP)!NEEDS!..............................................................................................................!55! NEEDS!BY!OWN/RENT!AND!AMI!.....................................................................................................!56! HOUSING!PREFERENCES!.................................................................................................................!57! SEASONAL!HOUSING!......................................................................................................................!59! SECTION&7&–&TOWN&LAND&AND&HOUSING&RESOURCES&............................................................&61! TOWNDOWNED!LAND!....................................................................................................................!61! REGULATORY!REQUIREMENTS!AND!FUNDING!.....................................................................................!63! ORGANIZATIONS!...........................................................................................................................!64! Winter'Park'Affordable'Housing'Corporation'(WPAHC)'.......................................................'64! Grand'County'Housing'Authority'(GCHA)'.............................................................................'64! APPENDIX&A&–&HOUSEHOLD&INCOME&AND&AFFORDABILITY&CALCULATIONS&.............................&1! APPENDIX&B&–&NEXT&STEP&RECOMMENDATIONS&......................................................................&1! APPENDIX&C&–&KEY&HOUSING&INDICATORS&...............................................................................&1! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!! INTRODUCTION& & Purpose& ! This!Housing!Needs!Assessment!quantifies!current!and!future!housing!needs!in!Winter! Park,!identifies!where!the!market!is!not!addressing!those!needs!and!provides! recommendations!on!how!those!needs!could!be!addressed.!It!answers!questions!such!as! how!much,!what!type!and!at!which!price!points!is!housing!needed!to!meet!the!needs!of! Town!residents!and!the!local!workforce.!The!information!is!intended!to!help!the!town! establish!housing!strategies!and!workforce!housing!policies!that!will!help!provide! opportunities!for!local!employees!to!live!in!Winter!Park!and!help!support!the!local!Town! character,!sense!of!community!and!economy.! ! Methodology& & Primary!research!was!conducted!to!generate!information!beyond!that!available!from! existing!public!sources.!This!research!included!a!focus!group!with!realtors!and!lenders! and!interviews!of!employers,!property!managers!and!stakeholders.!! ! Realtor!and!Lender!Focus!Group.!A!focus!group!with!three!realtors!and!three!local! lenders!was!held!in!Winter!Park.!Information!was!obtained!on!the!ownership!market! including!current!prices,!recent!trends,!occupancy!patterns,!availability!and!what! households!are!seeking!when!looking!to!purchase!or!rent!a!unit.!This!discussion!also! helped!define!housing!preferences!in!the!town,!including!unit!type!and!locations.! Lenders!provided!information!on!the!availability!of!financing!and!the!challenges!faced! when!residents!try!to!buy!a!home.! ! Employer!Interviews.!Eighteen!employers!in!the!Winter!Park!area!were!interviewed,! representing!about!520!year!round!jobs,!650!summer!seasonal!jobs!and!over!1,500! winter!seasonal!jobs!in!Winter!Park,!plus!additional!jobs!in!Fraser!through!Granby.! Interviews!probed!where!employees!live,!unfilled!jobs,!retiring!workers,!positions!of! high!turnover,!difficulty!finding!and!recruiting!workers,!changes!in!employment!over! time,!to!what!extent!employee!housing!is!perceived!to!be!an!issue!by!employers!and! their!associated!level!of!support!for!housing!assistance.!A!mix!of!employers!were! represented!including!government,!schools,!resort,!retail,!bar/restaurant,! construction/landscaping!and!real!estate!and!property!management.! ! Property!Manager!Interviews.!Four!property!managers!were!interviewed!who!lease! affordable!and!market!rate!rentals,!including!apartments,!condominiums!and!singleD family!homes.!Information!on!the!rental!market!including!rents,!vacancy!rates,!recent! trends,!renter!profiles!and!units!most!in!demand!was!obtained.! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!2! ! Stakeholder!Interviews.!Additional!interviews!were!conducted!with!town!staff!and! elected!officials,!the!Winter!Park!Chamber,!Grand!County!Economic!Development! Office,!Grand!County!Housing!Authority,!Winter!Park!Affordable!Housing!Corporation,! and!Miller’s!Inn!Affordable!Housing,!to!gather!their!input!and!perceptions!on!resident! housing!in!Winter!Park!and!its!relation!to!the!greater!Grand!County!region.!! ! Secondary&Data&Sources& ! A!variety!of!sources!of!published!information!were!used!in!the!preparation!of!this! report,!including!but!not!limited!to:! ! • 2000!and!2010!US!Census!data!and!population!and!household!projections!from! the!Colorado!Department!of!Local!Affairs!(DOLA);! ! • Employment!information!from!the!Quarterly!Census!of!Employment!and!Wages,! the!US!Bureau!of!Economic!Analysis,!and!DOLA;!!! ! • 2014!and!2015!Area!Median!Income!from!the!Department!of!Housing!and!Urban! Development!and!households!by!income!from!Ribbon!Demographics,!LLC;!! ! • County!Assessor!property!and!sales!information!and!MLS!for!recent!sales!and! current!listings;! ! • Winter!Park!building!permit,!land!resource!and!revenue!data!from!the!Town! planning!and!building!department;! ! • QCEW!zip!code!employment!data!from!the!Winter!Park!Chamber;!and! ! • Data!and!household!and!employer!survey!information!from!the!2014!Grand! Profile!and!the!2008!Grand!County!Housing!Needs!Assessment.! ! What&is&Attainable&Housing&in&Winter&Park?& ! This!report!centers!on!an!understanding!of!“what!is!attainable”!in!the!town!of!Winter! Park.!Housing!is!attainable!(or!affordable)!when!the!monthly!payment!(rent!or! mortgage)!is!equal!to!no!more!than!30%!of!a!household’s!gross!income!(i.e.,!income! before!taxes).!Although!there!is!some!variation,!this!standard!is!commonly!applied!by! federal!and!state!housing!programs,!local!housing!initiatives,!mortgage!lenders!and! leasing!agents.!! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!3! Please!reference!the!Appendix!for!more!details!on!the!area’s!household!incomes!and! affordability!price!points!on!which!this!report!is!based,!including!income!sources!used! and!assumptions!made!when!calculating!housing!affordability.! !!! Acknowledgements& We!would!like!to!thank!all!of!those!who!have!helped!us!and!have!given!us!their!time!and! assistance.!Information!in!this!report!relied!extensively!on!the!cooperation!and! participation!from!Winter!Park!staff,!elected!officials,!local!and!regional!employers,! realtors,!property!managers!and!community!stakeholders,!including!the!Winter!Park! Chamber,!Grand!County!Economic!Development!Office,!Grand!County!Housing! Authority,!Winter!Park!Affordable!Housing!Corporation,!and!Miller’s!Inn!Affordable! Housing.!Information!presented!in!this!report!is!as!much!based!on!data!and!numbers!as! it!is!on!the!experiences!and!observations!of!those!living!in!the!community,!which!would! not!have!been!possible!without!such!broad!local!participation.!We!have!enjoyed! working!with!the!Town,!its!businesses!and!residents,!and!we!appreciate!the!opportunity! to!work!with!communities!that!have!a!desire!to!understand!the!housing!needs!of!local! residents!and!the!workforce.! & && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!4! CONCLUSIONS&–&HOUSING&PROBLEMS,&OPPORTUNITIES&AND& STRATEGIES& Housing&Problems&&& With!a!growing!economy,!rising!homes!prices,!sharp!decline!in!both!rental!availability! and!homes!listed!for!sale,!a!shortage!exists!of!housing!at!prices!that!are!attainable!by! the!workforce.!This!is!leading!to!labor!shortages!and!employers!are!having!difficulty! filling!jobs!for!the!first!time!since!the!recession.!Approximately!100!jobs!were!unfilled! this!summer.!Multiple!factors!contribute!to!this!situation:! ! • Primary!(Local)!Homes!are!Losing!Ground.!Winter!Park!is!losing!ground!in!efforts! to!build!a!yearDround!community.!Residential!units!occupied!by!residents! dropped!7!percentage!points!between!2000!and!2010.!This!shift!is!continuing!–! the!large!majority!of!home!sales!are!for!second/vacation!home!use.!These!uses! simultaneously!generate!demand!for!workforce!housing!while!reducing!the! supply.! ! • Lack!of!Economic!Diversification.!Since!most!jobs!are!in!low!wage,!tourismD related!industries,!household!incomes!are!too!low!to!compete!for!housing!with! second!home!buyers!and,!increasingly,!renters.!With!approximately!75%!of!jobs! in!two!sectors!–!accommodations/food!service!and!arts/recreation,!Winter!Park! has!less!diversification!than!typical!for!a!mountain!resort!town.! ! • High!Seasonality!in!Employment.!Winter!Park!also!has!unusually!high!seasonal! variation!in!employment!with!about!twice!as!many!employees!during!the!ski! season!as!in!the!summer!months,!and!many!jobs!temporarily!disappear!during! the!spring!and!fall.!It!is!challenging!to!provide!housing!with!high!turnover!and! low!occupancies!during!the!shoulder!seasons,!but!can!be!financially!unfeasible!if! the!summer!months!also!have!high!vacancies.!! ! • Loss!of!Workforce!Rental!Units.!As!in!other!mountain!towns,!rental!units!are!in! short!supply.!An!extreme!shortage!is!likely!this!winter!due!to:! o Growth!in!jobs!that!are!not!been!matched!by!development!of!workforce! housing.! o Front!Range!residents!renting!units!to!avoid!ID70!traffic!congestion! (second!home!rentals).! o An!increase!in!yearDround!leases!this!summer,!meaning!fewer!units!will! be!available!for!winter!seasonal!employees.! o Long!term!rentals!being!sold!by!their!owners!to!primarily!second! homeowners!now!that!the!forDsale!housing!market!is!recovering.! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!5! o An!increase!in!the!popularity/success!of!shortDterm!rentals!at!the!base! area!(not!so!much!in!town)!through!VRBO!and!other!oneDline!hosting! sites.! ! • High!Housing!Development!Costs.!Land!is!expensive!and!stick!built!construction! costs!(excluding!land)!start!at!$170!per!square!foot.!Research!in!comparable! communities!has!found!total!construction!costs!(hard,!soft!and!land)!to!now! total!around!$300!per!square!foot.!One!of!the!reasons!costs!have!increased!in! recent!years!and!are!continuing!to!rise!is!a!shortage!of!construction!labor.!This!is! a!fallout!from!the!recession!when!construction!workers!had!to!find!other! employment!out!of!the!area!and!new!workers!were!unable!to!get!a!start!in!the! industry.!! ! • High!and!Increasing!Housing!Costs.!Many!workers!would!prefer!to!live!in!Winter! Park,!but!cannot!afford!to!either!rent!or!purchase!homes!in!the!Town.!Business! owners!that!used!to!live!in!Town!moved!to!Fraser,!Tabernash!or!further! downvalley!to!be!able!to!purchase!and!build!homes.!New!workers!and!renters! primarily!reside!in!Fraser!or!further!downvalley!for!more!affordable!rents.!Only! about!22%!of!workers!live!in!town,!which!is!low!compared!to!many!other! mountain!resort!communities.! ! While!insufficient!availability!and!housing!costs!that!are!too!high!relative!to!incomes!are! the!primary!problems,!other!housing!problems!detract!from!Winter!Park’s!evolution! into!a!yearDround!community!including:! ! • Poor!Condition!of!Units.!Many!rental!units!are!not!professionally!managed!and! their!landlords!often!do!not!adequately!maintain!and!repair!units.!This!has! become!more!of!a!problem!as!the!rental!stock!ages.! !! • Little!Diversity!in!Housing!Supply.!Winter!Park!has!a!very!high!percentage!of! condominiums!compared!to!other!types!of!units,!which!are!not!well!suited!as! homes!for!year!round!residents,!especially!owners.! ! • Lack!of!Locals!Neighborhoods.!Winter!Park!has!few!neighborhoods!in!which!local! residents!occupy!the!majority!of!homes.!Empty!houses!do!not!help!foster!a! sense!of!place!and!vibrancy!for!its!permanent!residents.!Neighborhoods!help! form!the!roots!of!community!and!are!an!important!consideration,!particularly!for! homeowners.!! ! Winter!Park!is!challenged!by!a!condition!unique!among!Colorado!mountain!towns!–!a! very!high!percentage!of!Front!Range!home!ownership!and!visitation.!This!factor!has! widespread!impacts!on!the!Town’s!housing!and!economy.!While!analysis!of!Front!Range! owners!was!beyond!the!scope!of!this!study,!generally!Front!Range!owners!are!more! likely!to:! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!6! ! • Handle!property!management!themselves!if!they!rent!their!homes,!impacting! the!level!of!service!provided!renters!and!response!to!needed!repairs!and! maintenance.! ! • Rent!or!purchase!homes!that!have!previously!housed!the!workforce!and!often! seek!housing!in!the!same!price!range!as!locals!–!competition!which!drives!prices! upward.! ! • Bring!groceries!and!other!necessities!with!them!rather!than!shop/spend!locally! and!generally!obtain!more!services!from!Front!Range!vendors.!This!reduces!their! expenditures!in!Town!and!reliance!on!local!services,!affecting!the!level!of! economic!diversify!in!Winter!Park!compared!to!many!other!mountain!resort! towns.& & Opportunities&and&Resources& ! Fortunately,!Winter!Park!has!many!assets!and!opportunities!to!enhance!the!availability! of!attainable!housing!to!locals:!!! ! • TownDOwned!Land.!The!Town!owns!four!parcels,!comprising!over!10!acres,!on! which!attainable!housing!could!be!built.!Under!current!zoning,!these!parcels! could!accommodate!up!to!about!280!homes.!! ! • Development!Opportunities.!Since!Winter!Park!has!reached!only!oneDfourth!of! its!buildDout!potential,!chances!to!incorporate!housing!specifically!for!the! workforce!in!future!residential!development!exists!through!multiple!possible! strategies!–!inclusionary!zoning,!annexation!agreements,!accessory!dwellings! and!incentives.! ! • Dedicated!Source!of!Revenue!for!Housing.!A!$3.00/sq!ft!impact!fee,!which! generated!nearly!$96,000!for!attainable!housing!in!2014!and!close!to!$1.5! million!during!the!2007!peak,!could!go!a!long!way!in!meeting!the!Town’s! attainable!housing!needs!if!leveraged!and!supplemented!as!necessary!with! appropriations!from!the!Town’s!real!estate!transfer!tax!and!other!funds.! ! • Workers!Want!to!Live!in!Winter!Park.!Employers!stated!that!their!employees! would!like!to!live!in!Winter!Park!if!housing!they!can!afford!is!available.!Several! business!owners!expressed!the!same!desire.! ! • Documented!Evidence!of!Demand.!The!Town!has!obtained!information!from!32! households!that!are!interested!in!purchasing!a!Hideaway!Junction!home!–!14!of! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!7! which!have!applied!since!2012.!Follow!up!with!these!households!could!be! sufficient!to!get!the!second!phase!of!the!development!underway.! ! • Sharing!Employees!with!Grand!Lake.!If!transportation!can!be!affordably!and! efficiently!provided,!sharing!workers!with!employers!in!Grand!Lake!and!other! areas!in!Grand!County!who!offer!summer!seasonal!jobs!would!make!more!year! round!housing!viable.! ! • Seasonal!Housing!for!Construction!Workers.!The!viability!of!housing!for!ski! season!employees!could!be!improved!by!housing!construction!workers!in!the! summer!and!fall!months.!If!the!construction!labor!shortage!is!addressed!by! recruitment!and!training,!workers!could!live!in!seasonal!worker!housing!as! construction!activity!picks!up.!The!same!employees!might!fill!both!types!of!jobs! (ski!area!in!winter,!construction!in!summer)!and!eventually!move!into!year! round!housing.!This!could!be!more!beneficial!for!the!community!than!using! construction!labor!from!the!Front!Range.! ! • Ability!to!Increase!Summer!Employment.!Other!mountain!resort!towns!have! made!great!progress!in!leveling!out!seasonal!fluctuations!in!jobs.!In!some,! summer!employment!now!exceeds!winter.!While!not!the!focus!of!this!report,! providing!more!summer!employment!opportunities!can!help!keep!winter! seasonal!workers!in!the!area!year!round,!building!the!local!community!base.! This!will!be!one!focus!of!the!economic!strategy!study!for!the!Fraser!Valley!that!is! running!concurrent!with!this!study.! ! Housing&Needs& ! Depending!on!Winter!Park!housing!program!goals,!between!40!and!160!attainable! housing!units!are!needed!through!2020.!! ! • Constructing!40!units!will!keep!up!with!future!job!growth!through!2020!and! retain!the!present!ratio!of!22%!of!workers!living!in!Town.!! ! • Building!160!units!will!both!keep!up!with!job!growth!and!boost!the!resident! workforce!ratio!to!30%.!! Summary&of&Housing&Needs&by&Own/Rent&Through&2020& &Current&Condition& (22%&of&workers& housed)& Alternative& (30%&of&workers& housed)& Units&needed&through&2020&40&160& Ownership'25!90! Rental!15!70! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!8! Both!ownership!and!rental!housing!are!needed!in!Town.!The!precise!ratio!constructed!is! a!reflection!of!housing!policy!as!well!as!demand.!! ! • To!retain!the!current!homeownership!rate,!58%!of!attainable!homes!should!be! for!homeownership.!! ! o Homeownership!supports!year!round!residency!and!allows!residents!to! invest!in!and!help!build!a!more!stable!community.!! o Attainable!homeownership!prices!should!range!between!$120,000!and! $325,000!for!working!households!(50%!to!140%!AMI).! o Preferred!product!types!are!townhomes,!duplexes!and!singleDfamily! homes!D!not!condominiums.! ! • Rentals!are!in!tight!supply!and!availability!will!decrease!even!further!this!winter.!! !! o Rentals!support!businesses!in!need!of!workers!and!help!new!residents! get!a!foothold!in!a!community.! o Rents!should!be!affordable!for!midDprofessionals!earning!about!$25!per! hour!down!to!entryDlevel!workers!earning!$10!to!$15!per!hour.!This! ranges!from!about!$500!up!to!$1,250!for!a!twoDperson!household!(80%! AMI!or!below).! o Renters!want!to!live!close!to!their!jobs.!CrossDcounty!commuting!to!share! employees!between!summer!and!winter!jobs!in!different!communities! would!require!a!transportation!solution.!! o Renters!want!pets.!Renters!also!want!their!units!to!be!kept!well! maintained!and!in!good!repair.!A!wellDmanaged!apartment!complex,!as! opposed!to!individually!rented!condos,!avoids!HOA!restrictions!that! prohibit!pets,!ensures!repairs!are!completed!in!a!timely!manner!and!will! provide!a!more!stable!rental!inventory.! ! Strategy&Recommendations& This!section!includes!many!strategies!for!the!development!of!attainable!housing!and! managing!housing!programs!over!time.!Using!only!those!resources!that!the!Town!now! allocates!to!housing,!undertaking!all!of!these!recommendations!is!likely!not!possible.!It! is!recommended!that!the!Town!first!develop!a!strategic!housing!plan!to!identify!housing! goals!and!a!plan!for!achieving!housing!objectives.!This!report!can!help!inform!this! process!by!providing!key!information!on!the!needs!and!demand!for!housing!in!Town!and! strategies!to!consider!for!providing!housing.!Through!this!process,!the!Town!will!be!able! to!prioritize!the!below!recommendations,!begin!implementing!those!which!can!be!more! easily!achieved,!build!the!resources!and!relationships!needed!to!accomplish!other! housing!needs,!and!establish!a!plan!to!manage!the!attainable!housing!that!is!produced.! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!9! The!Appendix!provides!a!brief!outline!of!recommended!next!steps!through!which!the! Town!can!establish!this!framework.! & Encourage&Downtown&Housing!–!Employee!housing!should!be!developed!in!Winter! Park’s!downtown!area!to:!!! ! • Respond!to!preferences!of!younger!employees!(e.g.,!Millennials)!to!live!in! walkable!urban!centers!with!convenient!access!to!shopping,!entertainment,! activities!and!recreation.! ! • Provide!high!density,!lower!cost!housing!options!in!an!area!where!it!is! appropriate.! ! • Add!vibrancy!to!downtown!and!create!yearDround!business!for!restaurants!and! retailers.! ! • Be!convenient!to!public!transit!to!the!base!area!and!downvalley.! ! Steps!to!accomplish!this!include:! ! • Inventory!vacant!land!and!parcels!appropriate!for!redevelopment/additional! density.! ! • Insure!that!zoning/development!codes!allow!for!residential!uses.! ! • Conduct!design!charrettes!involving!property!owners,!merchants,!employees,! architects,!and!planners!to!create!concepts!for!residential!development.! ! • Plan!for!rental!housing!to!be!located!above!commercial!space!and!ownership! housing!to!be!in!separate!buildings,!preferably!townhomes!with!ownership!of! land!underneath.!Condominiums!should!only!be!built!under!limited!conditions.! ! • Offer!incentives!and!subsidies!to!builders!and/or!business!owners!to! incrementally!develop!housing!in!small!phases.!Consider!a!competitive!process! for!selection!of!projects!to!be!subsidized.! ! Create&an&Employer&Assisted&Housing&(EAH)&Program&5&Businesses!and!publicDsector! employers!should!be!enabled!and!encouraged!to!help!house!employees.!As!is!common! in!other!resort!towns,!employers!could!share!responsibility!for!workforce!housing!since! they!directly!generate!housing!demand,!benefit!from!a!reliable!workforce,!have! resources!to!leverage!and!have!expertise!in!their!employees’!needs.!Multiple! approaches!feasible!for!both!small!and!larger!employers!should!be!provided!including:!! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!10! • A!down!payment!assistance!and!shared!equity!program!for!ownership.!For!deed! restricted!homes,!low!interest!deferred!mortgages!could!be!provided!by! individual!employers!or!through!a!pool!for!homes!that!are!deed!restricted!(like! Hideaway!Junction).!A!shared!equity!approach!whereby!employers!help!buy! homes!then!share!in!appreciation!upon!sale!might!be!a!better!approach!for!the! purchase!of!market!rate!housing.! ! • An!outreach!program,!particularly!for!employees!of!municipal,!county,!special! district,!emergency!and!medical!service!providers,!the!school!district!and! suppliers!of!other!essential!services.! ! • An!education!program!or!outreach!to!employers!to!explain!how!a!master!lease! program!could!operate.!Some!employers!welcome!the!opportunity!to!master! lease!units,!whereas!others!do!not!have!a!good!understanding!for!how!the! program!works.!Education!could!invite!more!participation.! ! • Technical!assistance!to!employers!that!have!land,!underDutilized!space!or!other! resources!for!the!development!for!employee!housing.! ! • Incentives!to!employers!who!provide!housing!for!employees,!particularly!on!site.! ! • A!master!lease!package!that!could:! ! o Identify!free!market!units!suitable!for!employees!and!their!pets;!multiple! units!in!a!single!projects!work!well!since!employees!can!rideshare! to/from!work!and!errands;! o Leverage!longDterm!apartment!financing!with!master!lease!agreements;! o Provide!up!front!development/construction!funding;! o Allocate!responsibilities!to!property!managers!(not!employers);! o Build!partnerships,!communication!and!unit!tradeDoffs!among!those!who! need!summer!housing!for!employees!and!others!that!need!winter! housing;! o Provide!sample!lease!and!management!agreements.!! ! • A!system!through!which!summer!and!winter!employers!can!cross!train!and!share! seasonal!employees!and!employee!housing,!enhancing!opportunities!for!those! employees!to!reside!in!Winter!Park!year!round.! ! • Work!with!the!larger!seasonal!employers!in!the!region!to!explore!seasonal! housing!needs!and!options!(e.g.,!Winter!Park!Resort,!Devil’s!Ranch,!etc.).! Understand!where!they!could!build!housing!and!any!impediments!to!its! development.!Opportunities!for!cooperation!appear!feasible.!In!many! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!11! communities!they!are!required!to!build!housing!through!PUD!agreements,! annexation!agreements,!commercial!linkage!or!other!regulations.!! ! Establish&a&Plan&for&Use&of&Attainable&Housing!Funds!D!Policies,!allocation!procedures! and!perDunit!standards!for!subsidizing!housing!construction!are!needed!to!make!the! most!effective!use!of!limited!resources,!provide!documentation!in!the!event!the!$3!per! square!foot!fee!is!ever!challenged,!and!mobilize!support!for!increasing!the!fee!over!time! to!keep!up!with!increases!in!development!costs.!Suggestions!include:! ! • Base!initial!attainable!housing!subsidy!amounts!that!are!paid!out!of!the!Fund!on! gaps!between!development!costs!and!what!attainable!housing!applicants!can! afford!to!pay.!! ! • Minimize!the!funds!allocated!per!attainable!unit!or!per!attainable!project!based! on!thorough!financial!analysis.! ! • Base!the!impact!fee!on!the!gap!between!the!market!price!of!housing!and!its! affordable!price.!Provide!adequate!documentation!to!support!the!fee!in!the! event!of!future!challenge.!Update!this!fee!on!a!yearly!basis!to!reflect!current! home!prices.! ! • Refrain!from!providing!subsidies!more!than!once!for!deed!restricted!housing! unless!prices!are!not!attainable!to!applicants.!The!WPAHC!has!bought!down! most!every!unit!reDsale!in!Hideaway!Junction!to!keep!reDsale!prices!the!same! since!2008.!New!applicants!may!or!may!not!be!able!to!afford!to!pay!more!than! the!2008!price!for!housing.!Subsidies,!if!needed,!should!be!based!on!the!new! household’s!ability!to!pay.! ! • Provide!a!competitive!selection!process!through!which!employers!and! developers!could!apply!for!financing!from!the!Town!to!help!subsidize!attainable! housing!projects.!This!can!get!the!private!market!involved!and!a!competitive! process!will!allow!the!Town!to!compare!projects!and!allocate!resources!to!those! that!will!best!address!needs.! ! • Request!Real!Estate!Transfer!Tax!or!other!Town!allocations!to!supplement! Affordable!Housing!Funds!when!needed.! ! • Learn!from!comparable!communities!that!have!revenue!dedicated!to!workforce! housing.! ! Proceed&with&Phase&2&of&Hideaway&Junction!–!Since!the!market!is!not!providing! attainable!ownership!opportunities!and!over!30!households!are!on!the!waitlist!for!units! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!12! in!the!second!phase,!planning!and!design!should!be!commenced.!Steps!in!this!process! could!include:! ! • Partnering!with!a!developer!so!that!Town!staff!time!can!be!spent!implementing! the!other!recommended!housing!strategies.!When!towns!take!the!lead!role!on! housing!development,!other!efforts!are!often!delayed.! ! • Issue!a!Request!for!Qualifications!(RFQ)!and!statement!of!interest!to!determine!if! developers!have!the!capacity!and!interest!to!work!with!the!Town!on!this!project.! ! • Make!the!most!of!the!remaining!property.!Design!the!site!and!units!to!be!livable,! compatible!with!surrounding!uses!and!responsive!to!market!demand!without! sacrificing!density.!Contrary!to!popular!belief,!high!density!does!not!equate!to! ugly,!unlivable!or!incompatible!with!community!character,!even!in!rural! mountain!communities.!! ! • Conduct!site!visits!to!existing!affordable!housing!projects!in!regional! communities!–!the!Town!of!Breckenridge!and!City!of!Boulder!have!award! winning,!highDdensity!projects!that!are!successful!and!attractive!family! communities.! ! • Follow!up!with!Hideaway!Junction!applicants!to!determine!interest!levels,! incomes,!unit!size!needed!and!amenities!preferred.!Advertise!for!additional! applicants.!Hold!a!lottery!to!select!applicants!if!needed.! ! • Explore!a!phased!construction!approach!whereby!homes!are!built!when! purchase!contracts!are!obtained!prior!to!construction,!a!technique!that!has!been! working!well!at!Peak!One!in!Frisco!and!is!common!in!the!private!sector,! particularly!since!the!recession!when!banks!became!cautious!of!speculative! homebuilding.!! ! • Consider!townhomes,!duplexes!and!potentially!singleDfamily!homes,!but!not! condominiums.! ! Improve&Public&Transit!–!To!improve!opportunities!for!employees!to!live!in!Winter!Park! year!round!and!to!attract!the!labor!force!needed!for!peak!winter!employment!that! cannot!be!housed!in!Winter!Park,!provide!a!functional,!cost!efficient!system!through! which!service!providers!deliver!transportation!services!in!a!coordinated!system.!! ! Plan&for&Apartment&Development!–!Since!the!rental!market!is!tight!with!low!vacancies! and!rising!rents,!many!jobs!will!continue!to!pay!wages!too!low!for!homeownership!and! two!to!three!years!are!needed!to!design/finance/build!an!apartment!property,!planning! should!start!soon!for!rental!development.!The!approach!should:! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!13! ! • Allocate!an!existing!site.! ! • Since!development!of!rental!housing!is!very!expensive,!either!plan!to!allocate! significant!resources!and!subsidies!into!a!conventionallyDfinanced!apartment! development!or!accept!that!Low!Income!Housing!Tax!Credits!(LIHTC)!are!the! most!attractive/viable!source!of!financing!at!present!for!apartments!in!Colorado! mountain!resort!towns.!High!quality,!attractive!properties!can!be!constructed! using!LIHTC!D!many!examples!in!other!mountain!resort!communities!can!be! provided!and!field!trips!to!successful!projects!are!encouraged.!! ! • Provide!a!range!of!units!priced!under!60%!AMI!up!to!the!needed!80%!AMI!in!the! Town!of!Winter!Park,!possibly!with!4%!LIHTC!financing,!which!can!fund!mixedD income!properties.!! ! • Work!with!an!experienced!LIHTC!development!team!to!be!efficient!and! competitive.! ! • Monitor!rental!vacancies!and!rent!rates!to!help!inform!development!and! financing!decisions.!! ! Explore&Regulatory&and&Incentive&Programs& ! • Consider!implementing!inclusionary!zoning!to!require!developers!of!second!and! highDend!homes!to!help!build!or!fund!(through!inDlieu!fees)!attainable!housing! for!residents.!With!55%!of!the!Town!unplatted!(including!potential!annexations! to!the!south),!there!is!significant!opportunity!to!use!this!program.!As!the!existing! 2,000!entitled!lots!are!built!out!the!Town!can!work!on!getting!inclusionary!zoning! in!place!for!the!next!round!of!subdivisions!and!annexations.! ! o Inclusionary!zoning!can!be!combined!with!other!incentives!to!make!the! program!more!palatable!–!such!as!density!bonuses!to!accommodate! attainable!units!without!reducing!the!number!of!market!rate!units!or! development!fee!waivers!for!the!attainable!units.!Research!inclusionary! zoning!programs!in!comparable!communities!to!understand!tradeoffs.! ! • Annexation!policies!and!agreements!to!impose!attainable!housing!requirements! as!a!condition!of!annexation.! ! • Adopt!more!complete!Attainable!Housing!Guidelines!that!define!the!Town’s! housing!goals!and!support!development!of!units!needed!to!achieve!goals.!Define! unit!types,!ownership!price!points!and!incomes!levels!that!units!must!serve!to!be! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!14! attainable.!Learn!from!Housing!Guidelines!established!in!other!mountain!resort! communities.! Improve&Housing&Program&Implementation&and&Management& ! • Adopt!an!Attainable!Housing!Plan!for!the!Town.!Define!whom!you!are!trying!to! house!(e.g.,!household!type,!incomes,!etc.).!Devise!strategies!necessary!to! achieve!defined!goals.!Check!progress!at!least!yearly!to!ensure!goals!are!being! met.! ! • Establish!clear!and!consistent!deed!restriction!criteria.!Base!deed!restrictions!on! income.!Income!requirements!define!not!only!the!resale!price!point!(based!on! the!household’s!ability!to!pay),!but!also!which!households!can!qualify!for!which! housing.!It!also!defines!the!upfront!oneDtime!subsidy!needed!to!make!units! initially!affordable.!Learn!from!other!communities!–!many!examples!of!effective! deed!restrictions!exist.!! ! • Cooperate!regionally!on!housing!needs.!The!region!operates!as!an!integrated! resident!and!workforce!community.!What!Fraser!builds!affects!the!market!in! Winter!Park!and!viceDversa.!The!Town!should!not!operate!in!a!vacuum!and! shared!resources!can!leverage!more!attainable!housing.!! ! • Consider!rebuilding!the!relationship!with!the!Grand!County!Housing!Authority.! The!Town!can!leverage!existing!resources!available!through!the!Grand!County! Housing!Authority!for!housing!management!and!programs,!including!down! payment!assistance.!A!Memorandum!of!Understanding!should!be!drafted!to! define!roles!and!responsibilities.!Efficient!use!of!Town!resources!invites! borrowing!upon!existing!resources!rather!than!duplicating!programs.! ! • Hire!a!staff!person!or!appoint!existing!staff!(if!available)!to!manage!the!affairs!of! the!WPAHC.!A!point!person!is!needed!to!optimize!the!use!of!limited!resources.!! ! • Get!educated!on!financing!options!and!the!use!of!leverage!to!stretch!limited! financial!resources!further.! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!15! SECTION&1&5&DEMOGRAPHICS& & Population&and&Households& ! Winter!Park!is!home!to!approximately!7%!of!Grand!County’s!population!and! households,!up!from!5%!in!2000.!! ! • Winter!Park’s!small!population!of!local!residents!has!been!growing!rapidly,!near! three!times!the!rate!in!the!rest!of!Grand!County.!The!Town!had!about!1,000! residents!in!2010!after!very!strong!growth!between!2000!and!2007,!followed!by! a!loss!of!about!22!persons!during!the!recession.! ! • The!population!appears!to!be!holding!steady!at!this!time.!In!the!next!five!years,! Winter!Park!should!gain!about!130!residents,!yet!this!will!depend!on!multiple! factors,!including!the!development!of!attainable!housing.!! ! Population:&&2000&to&2020&(Projected)*& ! &&2000&2010&2015&2020&%&change& (200052010)& %&change& (201052020)& Grand&County&12,442!14,843!14,929!16,848!19%!14%! Winter&Park&662!999!1,005!1,134!51%!14%! Source:!!2000!and!2010!Census;!DOLA!projections!(Grand!County);!Consultant!team! *Growth!estimates!for!Winter!Park!in!2015!and!2020!are!based!on!the!State!Demographer’s!projections! for!Grand!County!and!are!likely!conservative.!! ! • With!an!average!of!just!over!2!persons!per!household,!residents!currently!occupy! about!500!housing!units.!! ! Households:&&2000&to&2020&(Projected)& &&2000&2010&2015&2020&%&change& (200052010)& %&change& (201052020)& Grand&County&5,075!6,469!6,710!7,559!27%!13%! Winter&Park&318!481!500!560!51%!13%! Source:!!2000!and!2010!US!Census,!DOLA!projections!(Grand!County),!Consultant!team! ! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!16! Population&and&Household&Characteristics& ! Winter!Park!has:! ! • A!high!proportion!of!younger!residents!in!the!25!to!34!age!category,!but!the! number!of!young!children!(under!5)!and!seniors!is!growing!faster.! ! Population&Distribution&by&Age:&&2010& !Source:!!2000!and!2010!US!Census! ! • Relatively!more!persons!live!alone!or!with!roommates!(56%)!and!there!are!fewer! family!households!than!in!Grand!County!overall.!Fraser!is!similar!in!terms!of! household!composition!with!the!exception!of!its!higher!percentage!of!singleD parent!families.! ! && 6% 15% 7% 14% 14% 35% 10% 5% 10% 10% 24% 16% 27% 9% 0% 5% 10% 15% 20% 25% 30% 35% 40% Under 5 5 to 17 18 to 24 25 to 34 35 to 44 45 to 64 65 and over Pe r c e n t o f P o p u l a t i o n Age of Population Grand County Winter Park Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!17! Household&Distribution&by&Type:&&2010& !Source:!!2000!and!2010!US!Census! ! • A!higher!rate!of!growth!among!couples!with!children!than!any!other!type!of! household.! ! Percent&Change&in&Households&by&Type:&&2000&to&2010& & Grand& County&Fraser&Winter& Park& Couple,&no&children&32.0%!45.5%!55.6%! Couple,&with&children&7.2%!33.9%!97.1%! Single5parent&households&31.2%!16.1%!34.8%! Living&alone&50.6%!58.4%!54.9%! Other&non5family&households&1.2%!0.0%!22.4%! TOTAL&27.5%!31.7%!51.3%! Source:!!2000!and!2010!US!Census! ! • An!average!household!size!of!just!over!two!persons!per!unit;!smaller!than!the! Grand!County!average!of!2.26.!Renter!households!in!Winter!Park!are!smaller! (1.91!persons!on!average)!than!owner!households!(2.15!persons!on!average).! ! && 34% 19% 9% 29% 9% 23% 14% 6% 39% 17% 21% 15% 12% 33% 19% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Couple, no children Couple, with children Single parent households Living alone Other non-family households Pe r c e n t o f P o p u l a t i o n Grand County Winter Park Fraser Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!18! Household&Size:&&2010& Persons&per& Household& Grand& County& Winter& Park& 15person&&29%!39%! 25person&&41%!37%! 35person&&13%!12%! 45person&&11%!8%! 5+5person&&6%!4%! Average:&2.26!2.05! Source:!!2010!Census! ! • A!small!but!fast!growing!Hispanic/Latino!population!(4!households!in!2000;!22! households!in!2010).! ! Hispanic/Latino5Headed&Households:&&2000&to&2010& &Grand&County&Winter&Park& &#&%&#&%& 2000&170!3.3%!4!1.3%! 2010&302!4.7%!22!4.6%! %&change&(200052010)&78%!D!450%!D! Source:!2000!and!2010!US!Census! ! • A!high!rate!of!growth!in!seniors,!but!Winter!Park!still!has!a!relatively!small! number!of!senior!households!compared!to!Grand!County!as!a!whole.!Seniors! often!move!out!of!the!area!as!they!age.! ! Senior5Headed&Households:&&2000&to&2010& &&Grand&County&Winter&Park& &&#&%&#&%& 2000&604!11.9%!25!7.9%! 2010&986!15.2%!58!12.1%! %&change&(200052010)&63%!D!132%!D! Source:!!2000!and!2010!US!Census! ! Income& & The!2015!median!income!for!a!fourDperson!family!in!Grand!County!is!$78,000.!The!AMI! has!increased!2.1%!per!year!on!average!since!2010,!which!is!lower!than!the!increase!in! housing!prices.!In!other!words,!it!has!become!harder!for!the!workforce!to!afford!housing! in!the!past!five!years.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!19! Area&Median&Income:&&& Grand&County,&2005&to&2015& !Source:!!HUD! ! To!determine!the!sale!price!or!rent!for!housing!to!be!attainable!by!the!workforce,!costs! are!compared!to!the!incomes!of!households!with!employees.!For!the!Winter!Park! workforce,!the!following!incomes!are!used!since!the!majority!of!employees!live!within! the!larger!area!that!extends!to!Grand!Lake!(see!Section!3!–!Economic!Conditions!and! Trends).!As!was!the!case!in!2007!when!the!Grand!County!Housing!Needs!Assessment! was!conducted,!the!percentage!of!households!with!incomes!above!140%!AMI,! particularly!renters,!is!relatively!high.!& & Area&Median&Income:&&Owners&and&Renters& Winter&Park/Fraser&Valley/Grand&Lake&Area,&2015& ! &&Renters&Owners&TOTAL& <50%&28%!12%!17%! 50%&to&80%&27%!12%!17%! 80.1&to&100%&14%!9%!10%! 100.1&to&120%&6%!14%!11%! 120.1&to&140%&4%!11%!9%! Over&140%&21%!42%!35%! TOTAL&1,701!3,723!5,424! Source:!Ribbon!Demographics,!LLC;!Consultant!team! ! && $65,100 $70,200 $78,000 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 2005 2010 2015 Ar e a M e d i a n I n c o m e Yearly % Change: 2.1% Yearly % Change: 1.5% Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!20! SECTION&2&–&HOUSING&INVENTORY& & Housing&Units&–&Number&and&Occupancy& ! Winter!Park!has!just!over!2,600!residential!units,!which!equates!to!about!16%!of!the! units!in!Grand!County!as!a!whole.!The!rate!of!growth!has!been!very!high!with!the! number!of!units!more!than!doubling!between!2000!and!2010,!and!more!than!twice!as! fast!as!in!Grand!County.! ! Housing&Unit&and&Occupancy&Estimates! &Grand&County&Town&of&Winter&Park& &Housing& Units& Occupied& Units& Housing& Units& Occupied& Units& 2000&10,894!5,075!1,231!318! 2010&16,061!6,469!2,572!481! 2015&(est)&16,659!6,710!2,606!487! %&change&(2000&to&2010)&47.4%!27.5%!108.9%!51.3%! Source:!!2000!and!2010!US!Census,!DOLA!household!estimates!(Grand!County),!Consultant!team! ! A!low!percentage!of!housing!units!are!actually!occupied!by!local!residents!–!only!19%.! This!is!low!even!compared!to!other!highDcost!mountain!resort!towns.!The!decreasing! occupancy!trend!is!not!in!the!desired!direction!for!a!community!that!wants!more!year! round!residents.!The!number!of!total!housing!units!grew!at!twice!the!rate!of!households! (occupied!housing!units)!and!the!percentage!of!units!that!housed!local!residents! dropped!over!seven!percentage!points!between!2000!and!2010.! ! Occupied&Housing&Units:&&2000&and&2010& &Source:!!2000!and!2010!US!Census! 46.6% 40.3% 25.8% 18.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2010 % o f H o u s i n g U n i t s t h a t a r e O c c u p i e d Year Grand County Winter Park Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!21! Types&of&Units& ! Winter!Park!has!little!diversity!in!its!housing!inventory.!Over!70%!are!condominiums,! which!are!not!well!suited!for!occupancy!by!year!round!residents,!as!covered!in!more! detail!in!Section!4!–!Homeownership!Market!Conditions.!! ! Housing&Units&by&Type:&&Winter&Park,&2015& &Total&units& Condominiums&&&Multi5family&70.8%! Single&Family&&&Townhomes&28.6%! Mobile&Homes&0.6%! &2,606! Source:!!Grand!County!Assessor,!Town!of!Winter!Park! Building!Permits,!Consultant!team! ! Ownership& ! While!locals!reside!in!nearly!19%!of!the!housing!units,!only!13%!are!owned!by!Winter! Park!residents!based!on!the!mailing!addresses!in!Assessor!records.!Renters!who!live!in! units!owned!by!absentee!landlords!account!for!the!difference.! ! The!majority!of!housing!units!are!owned!by!Front!Range!residents.!This!is!higher!than!in! any!of!the!other!Colorado!ski!towns.! & Estimated&Owners&by&Place&of&Residence:&&Winter&Park,&2015& &Source:!!Grand!County!Assessor!records! ! The!ownership!pattern!varies!little!by!type!of!unit.!Even!among!singleDfamily!homes,! over!80%!have!outDofDarea!owners.!While!mobile!homes!are!the!exception,!locals!own! just!slightly!more!than!half!of!these!units.!! Front Range 59% Grand County 13% Other Colorado 1% Out of state/ country 27% Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!22! & Ownership&of&Homes&by&Type&of&Unit:&&2015& & Source:!!2010!US!Census,!Grand!County!Assessor,!Consultant!team! & Home&Values& ! Ownership!varies!by!value.!The!values!of!homes!owned!by!local!residents!tend!to!be! lower!than!those!owners!by!outDofDarea!parties.!The!exception!is!among!units!priced!at! or!above!$500,000.!Many!local!owners!purchased!these!homes!over!fifteen!years!ago,! which!have!since!appreciated!in!value.!Realtors!also!have!seen!an!increase!in!expensive! homes!being!purchased!by!households!that!earn!their!incomes!outside!of!Grand!County! or!through!other!resources!and!are!now!calling!Winter!Park!their!primary!home,!as! discussed!in!Section!4!–!Homeownership!Market!Conditions.! ! && 11% 18% 54% 13% 89% 82% 46% 87% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % o f H o u s i n g U n i t s Residence Type Out-of-area owner Local owner Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!23! Ownership&by&Estimated&Home&Value:&&2015& !Source:!Grand!County!Assessor,!Consultant!team! & Bedroom&Mix& ! Ownership!patterns!vary!in!terms!of!the!number!of!bedrooms.!Local!residents!tend!to! buy!homes!with!more!bedrooms!than!outDofDarea!owners.!While!second!home!owners! can!double!up!when!vacationing,!year!round!owners!seek!a!sufficient!number!of! bedrooms!to!accommodate!household!members,!even!though!they!may!opt!for!less! square!footage.! & Ownership&of&Homes&by&Bedroom&Size:&&2015& &&Local& owner& Out5of5area& owner& TOTAL& Units& Studio&5.0%!8.6%!8.2%! 15bedroom&13.9%!18.6%!18.0%! 25bedroom&34.1%!33.1%!33.3%! 35bedroom&32.8%!29.9%!30.3%! 45bedroom&10.2%!6.9%!7.3%! 5+5bedroom&4.0%!2.7%!2.9%! TOTAL&&344!2,262!2,606! Source:!Grand!County!Assessor,!Consultant!team! & & 13% 20% 17% 13% 4% 3% 3% 7% 20% 9% 15% 20% 9% 5% 9% 6% 11% 14% 0% 5% 10% 15% 20% 25% % o f H o u s e h o l d s Estimated Home Value Local Owner Out-of-area Owner Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!24! Age&of&Units& & Ownership!also!varies!by!age!of!the!unit.!Locals!are!more!likely!to!own!older!units!built! before!1990,!a!pattern!common!in!resort!towns,!because!they!bought!years!ago!when! housing!was!attainable!or!they!have!since!purchased!homes!at!the!lower!end!of!the! price!spectrum,!which!are!typically!older.!! ! An!exception!to!this!occurred!recently!during!the!postDrecession!construction!lull!when! builders!were!offering!competitive!prices.!Of!the!34!homes!built!between!2010!and! 2015,!nine!were!purchased!by!locals.!All!were!priced!over!$350,000!but!likely!a!bargain! compared!to!prices!in!2007!or!the!level!prices!will!reach!in!coming!years.! & Ownership&by&Age&of&Homes:&&2015& Year&Built&Local&& Owner& Out5of5area& Owner& TOTAL& Units& Before&1970&13.3%!5.8%!6.8%! 1970&to&1979&24.2%!17.7%!18.6%! 1980&to&1989&27.8%!23.1%!23.7%! 1990&to&1999&13.6%!20.5%!19.6%! 2000&to&2009&18.7%!31.6%!29.9%! 2010&to&2015&2.4%!1.2%!1.3%! TOTAL&344!2,262!2,606! Source:!Grand!County!Assessor,!Consultant!team! ! Residential!construction!has!varied!over!the!years.!Activity!was!strong!in!the!1980’s,! slowed!in!the!1990’s!and!early!2000’s,!strong!again!in!2005!to!2008,!almost!halted!due! to!the!recession!and!is!just!now!starting!to!pick!up!again.!This!volatility!is!common!in! resort!communities,!yet!is!somewhat!more!pronounced!in!Winter!Park.! ! ! Owner/Renter&Mix& ! Among!Winter!Park!households,!about!58%!own!their!homes!and!42%!rent,!a!mix!that! held!steady!between!2000!and!2010!when!homeownership!was!increasing!in!most!of! the!state.!! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!25! Homeownership&Rate:&&2000&and&2010& &Source:!!2000!and!2010!US!Census! & Attainable&Housing& ! Only!two!attainable!housing!projects!for!residents!exist!in!Winter!Park,!providing!a!total! of!20!homes!for!ownership!and!six!rentals.!! ! The!town!of!Fraser!has!one!affordable!rental!project!providing!50!lowDincome!housing! tax!credit!(LIHTC)!units.! ! Attainable&Homeownership:&&Winter&Park& Project&#&Units&Size&(sq.&ft.)&Sale&Price&Type& Miller’s&Inn&1!500!115%!AMI!Condominium! Studio!1!500!115%!AMI!Condominium! 1Db!4!650D1,100!115%!AMI!Condominium! 2Db!5!800D1,200!115%!AMI!Condominium! Hideaway&Junction&!!! 2Db!4!1,700!$225,000!Single!family! 3Db!6!1,900!$245,000!Single!family! ! Attainable&Rentals:&&Miller’s&Inn,&Winter&Park& Miller's&Inn&#&Units&Size&(sq.&ft.)&Rent& Studio&2!310D370!$400D$675! 15b&4!400D710! ! && 68.2% 68.9% 58.2% 57.6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2010 % o f H o u s e h o l d s Year Grand County Winter Park Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!26! LIHTC&Affordable&Rentals:&&Wapiti&Meadows,&Fraser& &#&Units&Size&(sq.&ft.)&40%&AMI& Rent& 50%&AMI& Rent& 60%&AMI& Rent& 15b&4!703!$498!$644!$790! 25b&26!927!$605!$780!$956! 35b&20!1,130!$811!$906!$1,109! TOTAL&&50!D!7!!15!!28!! Source:!!Property!manager!interviews! ! • Millers&Inn!is!an!original!lodge!in!Winter!Park!that!was!used!for!short!term!and! later!long!term!rental!housing.!The!project!was!purchased!in!late!December!2002! and!now!provides!nine!residential!cabins!and!a!sixDunit!apartment!building! affordable!for!the!local!workforce.!! ! o Ownership!at!Miller’s!Inn!is!restricted!to!persons!who!earn!no!more!than! 115%!AMI.!Units!can!appreciate!no!more!than!3%!per!year.! ! o Rentals!may!be!leased!by!Grand!County!employees!or!business!owners! only.!There!are!no!income!qualification!standards!for!tenants.!If!they! cease!being!employed!in!Grand!County,!then!the!lease!terminates.! ! • The!first!phase!of!Hideaway&Junction!was!built!by!the!town!of!Winter!Park!in! 2008.!It!provides!10!singleDfamily!homes!for!purchase!by!residents!employed!in! Grand!County.!There!are!no!income!limits!imposed!on!the!units!but!they!are! deed!restricted!with!appreciation!caps!of!2%!per!year!for!the!first!three!years,! then!1%!annually!thereafter.!Fourteen!households!have!been!added!to!the! waitlist!since!2012.!The!units!originally!sold!for!$225,000!(2Db)!and!$245,000!(3D b)!and!the!Winter!Park!Affordable!Housing!Corporation!(WPAHC)!has!retained! those!sale!prices.! ! • Wapiti&Meadows!is!a!Low!Income!Housing!Tax!Credit!(LIHTC)!rental!property! built!in!1995.!It!is!managed!by!Mercy!Housing!and!provides!rentals!priced!for! households!earning!40%,!50%!and!60%!AMI.!The!property!has!carried!a!waitlist! for!the!past!two!years.!As!of!July,!there!are!five!households!on!the!waitlist.! ! Employer&Assisted&Housing&(EAH)& ! As!is!the!case!in!many!highDcost!communities!and!especially!in!resorts,!employers! provide!housing!for!some!of!their!employees.!! ! • Winter!Park!Resort!houses!165!to!185!employees!in!dormDstyle!accommodations! (shared!bedrooms).!A!few!units!are!located!at!the!base!of!the!mountain,!but! most!are!in!Fraser,!Tabernash!or!Granby.!Transportation!is!provided!for!these! units!in!the!winter.!The!units!are!generally!about!50%!vacant!in!the!summer,!but! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!27! fully!occupied!in!the!winter!with!waitlists.!Of!the!units!in!Granby,!one!is!occupied! this!summer!by!a!Resort!employee!and!the!other!units!are!housing!other!locals,! at!least!until!needed!by!the!Resort!this!winter.!The!Resort!has!done!more! outreach!to!summer!employers!this!year!to!let!them!know!that!they!have! summer!units!available!for!their!workers.! ! • Devil’s!Thumb!–!About!20!employees!are!housed!in!Fraser!in!a!converted!hostel! that!was!acquired!within!the!last!couple!of!years,!and!about!30!live!in!various! units!provided!by!Devil’s!Thumb!within!a!couple!miles!of!the!resort.!Additional! housing!for!Visa!workers!has!been!provided!on!site!for!over!10!years.!Local! transportation!is!challenging!and!inconsistent,!so!it!is!desirable!to!keep!workers! close!to!their!jobs.! ! • Other!Employers!–!A!few!smaller!employers!provide!units!or!some!type!of! housing!assistance!for!employees,!but!the!practice!is!not!as!widespread!as!in! some!resort!communities!which!face!housing!shortages!in!the!summer!as!well!as! winter.!Some!employers!who!previously!provided!units!stopped!doing!so!during! the!recession!when!they!were!no!longer!needed!and!hard!to!keep!full.!! & Loss&of&Employee&Housing& ! As!indicated!earlier,!locals!are!losing!ground!to!second!home!owners,!from!occupying! 26%!of!units!in!2000!to!less!than!19%!in!2010.!While!some!of!this!is!due!to!the!type!and! price!of!homes!built,!it!also!is!the!result!of!the!loss!of!units!that!locals!previously!owned! or!occupied.!The!following!trends!are!likely!to!continue:! ! • When!employees!retire,!many!want!to!remain!in!the!area!and!their!homes!are! then!no!longer!housing!the!workforce.! ! • Seniors/retirees!who!move!out!of!the!area!as!they!age!sell!their!homes!to! second!home!buyers!who!can!afford!the!higher!prices.!! ! • Homes!that!were!once!rented!long!term!or!ownerDoccupied!are!now!rented! short!term!through!onDline!sites,!though!this!is!more!common!at!the!base!area! than!in!town.! ! • When!employees!move!out!of!the!area!or!move!up,!their!homes!are!likely!to!be! sold!to!second!home!buyers,!especially!if!priced!over!$300,000.! ! • Front!Range!residents!are!renting!homes!that!local!workers!used!to!rent.!! ! Planned/Pending/Potential&Development&& ! Approximately!11,000!housing!units!can!be!built!in!Winter!Park!in!total,!based!on!a! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!28! study!completed!as!part!of!the!2006!Town!Plan.!This!includes!already!developed!lots,! approved!and!platted!but!unbuilt!lots!within!Town!boundaries,!and!potential! annexations!(Section!3!of!the!2006!Winter!Park!Town!Plan).! ! As!of!2015,!the!Town!is!less!than!¼!built!out.!Another!2,390!units!are,!however,!entitled! or!moving!through!the!platting!process,!but!not!yet!built.!If!all!of!these!units!are! constructed,!Winter!Park!would!be!about!45%!built!out.! ! Buildout&Summary:&&Winter&Park& &#&of&units&%&of&buildout& Buildout&11,000!D! Built&Units&2,606!23.7%! Entitled/in&process&2,390!21.7%! Platted,!but!unbuilt!355!D! Entitled,!not!yet!final!plat!2,000!D! In!platting!process!35!D! Potential&of&Inclusionary&Housing&3,600!! !Source:!!Town!of!Winter!Park!Planning!Dept.! ! Entitled!projects!with!final!plat!approval!include!a!variety!of!product!types,!which!would! enhance!the!much!needed!diversity!in!the!town’s!residential!inventory:! ! • Preserve!–!10!unit!singleDfamily!subdivision! • Trailhead!Lodges!–!24!condominium!units!remaining!! • Whistlestop!Townhomes!–!18!townhome!units!remaining!! • Lakota!Central!Village!–!100!singleDfamily,!duplex!and!triplex!units!remaining!! • Rendezvous!Filing!1!–!191!singleDfamily!and!multipleDfamily!units!! • Serenity!Trail!at!Winter!Park!–!12!townhome!units! ! There!are!multiple!developments!in!the!Town!that!have!entitlements,!but!which!have! not!filed!a!final!plat.!This!includes:!!Rendezvous!at!Winter!Park,!Idlewild,!Lakota!North,! Lakota!South!and!the!base!at!Winter!Park!Resort.!These!projects!combined!have!rights! to!develop!about!2,000!more!residential!units.!! ! Two!developments!are!going!through!the!platting!process!currently!in!Winter!Park!and!a! few!are!under!construction.!All!homes!will!be!marketDrate.!Trailhead!Lodges!are! targeted!for!second!homeowners!and!for!owners!that!want!to!shortDterm!rent!their! units.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!29! Under&Construction&and&Pending&Approvals:&&& Winter&Park,&2015& &#&of&units&Type&of&homes&Price&Point& Trailhead&Lodges&& (under!construction)& 24!Condominiums!Over!$350,000! Preserve& (begin!in!2015/16)& 2!Single!Family!ND! Whistlestop&Townhomes& (by!end!of!year)& 2!Townhomes!ND! Lakota&Central&Village& (under!construction)& 2!Duplex!units!ND! Vasquez&Village&& (plat!process)& 30!Condominiums!ND! Reunion&Station&& (plat!process)& 5!Townhomes,!mixed! with!commercial! $400,000!and!up! Source:!!Town!of!Winter!Park!Planning!Dept.! ! The!Town!of!Fraser!also!has!some!activity:! ! • Rendezvous!is!under!development!and!includes!54!singleDfamily!homes.!Prices! will!start!near!$400,000!for!units!with!garages!that!are!about!1,100!square!feet! in!size;!and! ! • Elk!Creek!filings!1!and!2!received!final!plat!approval!for!71!singleDfamily!lots,! which!will!be!at!market!prices.!Filing!3!is!still!pending!with!potential!to!provide!8! attainable!housing!lots!priced!below!market!for!purchase!by!local!residents.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!30! SECTION&3&–&ECONOMIC&CONDITIONS&AND&TRENDS& & Number&of&Jobs& & Since!2006,!between!32%!and!34%!of!jobs!in!Grand!County!have!been!located!in!the! Winter!Park!zip!code!area.!! ! Jobs!grew!at!a!slightly!slower!rate!in!Winter!Park!between!2010!and!2015!than!in!Grand! County,!but!have!nearly!returned!to!the!peak!job!levels!that!existed!in!2007.!By!2020! both!the!town!and!the!county!will!have!more!than!recovered!all!jobs!lost!during!the! recession.!! ! Most!employers!in!Winter!Park!expect!to!increase!their!employment!over!the!next!five! years.! ! Jobs&Estimates&and&Projections:&&2007&to&2020& &!&!&!&!&!Average&Yearly&%& growth! &!2007&2010&2015&2020&20105 2015& 20155 2020& Grand&County!9,960!8,816!9,592!10,707!1.7%!2.2%! Winter&Park&(80482)!3,231!2,949!3,175!3,544!1.5%!2.2%! Source:!Colorado!Dept.!of!Local!Affairs,!QCEW!zip!code!files,!Consultant!team! *Job!growth!estimates!for!Winter!Park!in!2015!and!2020!are!based!on!the!State!Demographer’s! projections!for!Grand!County.! ! Seasonality&of&Jobs& ! Grand!County!has!two!similar!employment!peaks!–!one!in!the!summer!and!one!over!the! winter.!! ! May!and!October!are!the!lowest!employment!months,!which!occur!at!the!changeover!of! the!seasons.!These!low!employment!months!are!generally!representative!of!the!year! round!employment!base!in!the!area,!which!totaled!about!6,000!jobs!in!2014.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!31! Grand&County&Employment&by&Month:&&2007,&201,&2014& ! !Source:!!Quarterly!Census!of!Employment!and!Wages!(QCEW)! ! Summer!and!winter!seasonal!employment!in!Grand!County!is!estimated!to!be!about! 1,900!jobs!each!in!2015.!If!these!jobs!were!evenly!dispersed!throughout!the!county,!this! would!greatly!assist!the!provision!of!housing!for!employees!holding!seasonal!jobs.!They! could!hold!different!jobs!each!season!but!live!in!the!community!year!round,!and! workers!leaving!their!winter!jobs!(and!rental!housing)!would!be!replaced!by!workers! coming!in!to!fill!summer!jobs.! ! Adding!complication!is!that!summer!and!winter!employment!peaks!vary!by!location!in! the!county.!Granby,!Grand!Lake!and!Tabernash!all!exhibit!higher!summer!employment! peaks!than!in!the!winter.!Winter!Park,!however,!is!highest!in!the!winter,!adding!about! 60%!fewer!summer!seasonal!jobs!than!winter!seasonal!jobs.!Seasonal!summer!housing! located!in!Grand!Lake,!which!is!often!unoccupied!in!the!winter,!would!be!a!45Dminute! commute!for!winter!seasonal!workers!employed!in!Winter!Park.!The!commute!adds! significantly!to!the!cost!of!living!and!is!not!affordable!for!employees!holding!lowDwage! seasonal!jobs.! ! Grand&County&Employment:&&Year&Round&and&Seasonal& &Average& Employment& Estimated&year5 round&jobs& Summer& seasonal& Winter& seasonal& 2014!9,348!7,877!1,844!1,921! 2015!9,592!8,082!1,893!1,971! 2020&10,707!9,022!2,113!2,201! Source:!!DOLA!employment!estimates!and!projections,!! QCEW!monthly!employment!estimates,!Consultant!team! 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Gr a n d C o u n t y E m p l o y m e n t 2007 2010 2014 Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!32! ! The!percentage!of!Grand!County!jobs!that!are!located!in!Winter!Park!fluctuates!during! the!year!–!from!a!low!of!30%!in!the!spring!and!summer!months!(April!through! September)!to!a!high!near!45%!in!the!winter!(October!through!March).! Based!on!these!quarterly!fluctuations,!Winter!Park!will!conservatively!increase!from! about!2,200!yearDround!jobs!to!nearly!4,200!this!winter,!a!peak!gain!of!about!2,000!jobs.! ! Employment&by&Quarter:&&Grand&County&and&Winter&Park,&2015& & Average& Yearly&Jobs&Q1&Q2&Q3&Q4& Grand&County!9,592!10,087!9,274!8,961!10,045! Winter&Park!3,175!4,162!2,376!2,283!3,892! Source:!!DOLA!employment!estimates,!QCEW!zip!code!files! ! Jobs&and&Wages&by&Sector& ! Jobs!in!Grand!County!peaked!in!2007,!fell!through!2011!and!began!coming!back!in!2012.! The!recovery!is!somewhat!slower!than!in!other!mountain!resort!communities!where!the! rebound!started!as!early!as!2010.! ! • Construction,!retail,!accommodation/food!services!and!real!estate,!rental!and! leasing!lost!the!most!jobs!during!this!period.!! ! • The!recovery!has!been!led!by!real!estate,!arts,!entertainment!and!recreation,! and!accommodation/food!services!in!Winter!Park.! ! • Construction!jobs!are!still!lagging!in!both!Winter!Park!and!the!county!as!a!whole.! Construction!jobs!in!the!county!fell!by!44%!(700!jobs)!beginning!in!2008!through! 2011.!As!of!2013,!these!jobs!were!only!60%!recovered!from!their!2007!peak.! Local!contractors!noted!that!construction!just!began!picking!up!this!year!since! the!recession,!and!are!cautiously!optimistic!that!the!uptrend!will!continue!for!the! next!few!years.!! & The!average!wage!paid!in!Grand!County!in!2014!was!about!$31,600.!This!is!equivalent!to! 50%!AMI!for!a!twoDperson!household.!! ! • There!is!little!diversity!in!jobs!in!Winter!Park!compared!to!larger!resorts!with!less! seasonal!variation!and!to!the!county!as!a!whole.!Winter!Park!jobs!are!also! dominated!by!the!lowest!wage!sectors!of!accommodation!and!food!services!and! arts!and!recreation!(77%!of!jobs).!As!a!result,!the!average!wage!paid!in!Winter! Park!in!2014!($25,000)!was!about!22%!lower!than!the!county!average.! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!33! • Most!winter!seasonal!jobs!are!in!the!low!paying!sectors!of!arts,!entertainment! and!recreation,!accommodation!and!food!services,!and!retail,!plus!jobs!in!real! estate,!rental!and!leasing.!Seasonal!positions!typically!range!in!pay!from!about! $10!to!$15!per!hour!depending!upon!the!position!and!business.! & Jobs&and&Wages&by&Industry&Sector:&&& Grand&County&and&Winter&Park,&2014! !Source:!!QCEW,!DOLA,!Consultant!team! ! Labor&Force&and&Unemployment& ! In!Grand!County,!the!unemployment!rate!has!been!below!that!of!the!state!as!a!whole! since!2005,!with!the!exception!of!2010.!This!is!typical!of!many!other!resorts,!as!shown!in! the!2014!Grand!Profile.!! ! Both!prior!to!2009!and!beginning!again!in!2014,!unemployment!in!Grand!County!was! below!5%.!When!unemployment!drops!below!the!natural!cycle!of!employment/! unemployment,!typically!around!5%!to!6%,!this!can!be!one!indicator!of!a!labor!shortage.! ! Average!unemployment!for!Grand!County!in!2014!was!4.1%.!Estimates!are!not!available! for!Winter!Park,!though!with!its!stronger!real!estate!recovery!and!what!employers!have! reported,!the!rate!is!likely!lower.!! ! Unemployment!is!always!highest!in!May.!May!2015!is!the!first!year!since!the!recession! that!unemployment!fell!below!5%!for!this!month!(4.6%).!! ! $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Av e r a g e Y e a r l y W a g e % o f T o t a l J o b s % jobs (Grand County) % jobs (Winter Park) Avg Yearly Wage Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!34! Unemployment&Rate:&&Grand&County&and&Colorado&–&2005&to&2014& &&2005&2006&2007&2008&2009&2010&2011&2012&2013&2014& Grand!County&4.1%!3.2%!2.6%!3.7%!6.7%!8.8%!8.0%!7.2%!5.8%!4.1%! Colorado&5.0%!4.3%!3.7%!4.8%!7.3%!8.7%!8.3%!7.8%!6.8%!5.0%! Source:!Bureau!of!Labor!Statistics!(BLS)!LAUS! ! Another!measure!of!a!labor!shortage!is!when!job!growth!outpaces!growth!in!the!local! labor!force.!This!occurred!in!Grand!County!between!2010!and!2014.!The!labor!force! declined!slightly,!while!jobs!increased!by!6%.!! ! Change&in&Labor&Force&and&Jobs:&&Grand&County&–&2010&to&2014& &2010&2011&2012&2013&2014&%&change& (20105&2014)& Labor&force&8,950!8,793!8,750!8,810!8,934!D0.2%! Jobs&8,816!8,809!8,799!9,104!9,348!6.0%! Source:!Bureau!of!Labor!Statistics!(BLS)!LAUS,!Colorado!Dept.!of!Local!Affairs!(DOLA)! ! Commuting& Winter!Park!is!a!net!supplier!of!jobs!in!the!area.!Workers!mostly!find!housing!in!other! communities,!then!commute!in!for!work.! ! The!2008!Grand!County!Housing!Needs!Assessment!found!that!about!19%!of!the! workforce!in!Winter!Park!resided!within!the!town,!meaning!81%!commuted!in!from! other!areas!of!the!county!or!from!outside!the!county.! ! In!2015,!employers!estimate!that!about!22%!of!the!yearDround!workforce!in!Winter!Park! lives!in!town!–!about!590!workers!living!in!320!households.!This!does!not!mean,! however,!that!more!employees!live!in!Winter!Park!now!–!there!are!fewer!employees! today!than!in!2008.! ! There!is!little!out!commuting.!Most!residents!of!Winter!Park!work!in!the!town.!About! 80%!of!Winter!Park’s!households!that!have!at!least!one!employed!person!are!employed! within!the!Town.!Results!from!the!2014!Grand!Profile!household!survey!support!that!a! higher!proportion!of!working!renter!households!are!employed!in!town!than!are!owners.!! ! Winter!seasonal!workers!were!mostly!living!in!Winter!Park,!Fraser,!and!Tabernash,!with! some!in!Granby.!Winter!Park!Resort!began!running!a!bus!to!Granby!last!winter!to! shuttle!workers!for!the!first!time!since!before!the!recession.! Jobs&Per&Employee&and&Employees&Per&Household& ! It!is!estimated!that!workers!in!Grand!County!hold!about!1.2!jobs!on!average!and!that! there!are!about!1.84!workers!per!household.!These!figures!are!used!to!translate!job! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!35! growth!into!housing!units!needed!by!workers!that!fill!new!jobs.!These!figures!are!in!line! with!other!mountain!resort!towns!and!show!little!change!since!the!2008!Grand!County! Housing!Needs!Assessment.! & Employers,&Employees&and&Housing&& A!few!patterns!became!apparent!through!employer!interviews:! ! • Filling!seasonal!jobs!became!an!issue!last!winter!for!mostly!the!larger!employers,! but!a!few!smaller!employers!had!difficulty!as!well.!The!lack!of!labor!has!resulted! in!problems!for!some!this!summer.!One!had!a!worker!decline!a!position!offered! to!them!this!year!due!to!the!inability!to!find!housing!–!this!had!not!happened! before.!One!had!a!ski!tech!position!remain!unfilled!all!of!last!winter,!which!had! not!happened!for!several!years.!A!few!others!had!some!entry!positions!remain! unfilled!this!summer.!Others!reported!few!applicants!for!positions!–!one!or!two! for!which!they!had!received!a!dozen!in!the!past.!Employers!estimated!that!about! 3%!of!jobs!were!unfilled!this!summer!in!part!due!to!a!lack!of!housing.!! ! • Many!of!the!smaller!employers!stated!that!housing!has!not!been!much!of!a! problem!for!them,!but!that!they!are!aware!that!it!has!been!for!others.!These! same!employers!stated!that!they!hire!their!seasonal!and!other!positions!from! local!households!–!persons!who!already!have!housing!in!the!area.!Many!also! “have!their!hiring!radar!up!yearDround”!to!recruit!local!workers!for!upcoming! positions.!In!the!years!preceding!the!recession,!competition!with!other! businesses!and!the!shrinking!labor!pool!made!hiring!local!residents!very!difficult.! As!jobs!increase!and!unemployment!falls,!businesses!will!struggle!to!“hire! locals.”! ! • Even!when!workers!hire!locally,!they!suffer!some!loss!due!to!competition!with! other!employers!in!the!area.!At!the!peak!of!last!winter,!employers!were! outbidding!others!with!wage!hikes!to!attract!employees.!With!yearDround! positions,!attractive!benefit!packages!and!wage!differentials!cause!some! employees!to!shop!positions.!! ! • Positions!that!are!most!difficult!to!fill!and!keep!filled!include:! ! o Police!positions!with!the!town!of!Winter!Park.!Many!prefer!the!Summit! County!area!as!the!pay!scale!is!similar,!but!there!is!more!choice!in! housing.!Most!officers!hired!with!the!town!must!reside!outside!the!town.! Only!one!officer!lives!in!town.! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!36! o Low!wage!positions,!including!dishwashers,!housekeepers,!servers!and! bussers,!ski!techs!and!sales!clerks!due!to!competition!among!other! employers.!There!are!not!enough!workers!to!go!around.! ! o Construction!laborers!earning!$15!to!$17!per!hour,!and!landscapers.! Many!left!the!industry!or!have!not!returned!to!the!area!since!the! recession.!There!is!too!much!work!on!the!Front!Range!and!workers!are! not!migrating!back.!This!will!impact!the!cost!to!develop!attainable! housing.! ! o Experienced!staff!in!the!food!industry!–!line!cooks,!chefs!and!skilled!wait! staff!–!and!skilled!staff!in!other!professions.!Many!employers!noted!that! skilled!jobs!take!longer!to!fill!and,!once!filled,!if!workers!cannot!find! suitable!housing!within!a!couple!of!years,!they!will!leave.! ! o Teachers!must!typically!be!recruited!from!outside!of!the!area.!There!is! not!a!local!education!program!from!which!they!can!be!recruited.!The!best! bet!for!retention!is!to!find!someone!that!used!to!live!here!and!now!wants! to!come!back.! ! o The!Grand!County!Road!and!Bridge!Department!has!employees!that!have! been!working!for!them!for!over!30!years!in!every!District!except!District! 1,!which!is!in!the!Winter!Park!area/Fraser!Valley.!The!longest!term! employee!in!District!1!is!five!years.! ! • Although!most!employers!have!found!it!harder!to!hire!for!positions!in!recent! years,!most!had!a!harder!time!getting!quality!workers!just!before!the!recession.! Problems!have!not!yet!reached!preDrecession!levels.! ! • Employers!in!Winter!Park!expected!very!few!employees!to!be!retiring!over!the! next!five!years!–!perhaps!2%.!Employers!with!workers!in!other!parts!of!the! county,!particularly!around!Granby,!foresee!retiring!employees!being!more!of!a! problem.!! ! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!37! SECTION&4&–&HOMEOWNERSHIP&MARKET&CONDITIONS& ! Trends& ! The!real!estate!market!in!Winter!Park!and!Grand!County!as!a!whole!has!slowly! recovered!from!the!depths!of!the!recession!in!2009!through!2012!but!prices!have!not! returned!to!peak!levels.! ! • In!2014,!sales!volume!(total!dollar!value!of!all!sales)!equaled!less!than!60%!of!the! 2007!peak.! ! Gross&Sales&Volume&for&Grand&County,&2004&5&2014! ! !Source:!Land!Title! ! ! • The!recovery!has!been!slower!than!in!most!comparable!Colorado!mountain! counties!with!the!exception!of!Routt!County!(Grand!Profile).! ! • Price!increases!in!Grand!County!have!been!modest!–!slightly!less!than!12%!in!the! past!four!years!for!both!singleDfamily!and!multiDfamily!homes.! ! ! && $0 $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 $700,000,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!38! Average&Sales&Price:&&Grand&County,&2011&5&May&2015! !Source:!Land!Title! ! • The!number!of!sales!countywide,!however,!has!jumped!since!2011!–!over!40%! for!singleDfamily!homes.!Growth!in!multiDfamily!sales!has!been!slower.! ! • Sales!in!Winter!Park!have!comprised!over!20%!of!sales!in!the!county!as!a!whole! since!2012.!Sales!between!2011!and!2012!jumped!significantly!and!have!shown! little!increase!since!2012.! !! Number&of&Residential&Sales,&Grand&County&and&Winter&Park,&2011&5&2014& ! &Grand&County&Winter&Park& &Single&Family&Multi&Family&All&Residential& 2011&324!330!115! 2012&408!347!188! 2013&413!366!164! 2014&459!407!192! Change&(201152014)&41.7%!23.3%!67.0%! Source:!Land!Title,!County!Assessor,!MLS! ! Availability&–&Homes&Listed&for&Sale& ! Housing!availability!has!significantly!decreased!in!the!past!year.!Compared!with!the!180! units!that!sold!in!2014,!the!July!inventory!of!about!170!units!equals!nearly!a!oneDyear! supply.!While!this!suggests!Winter!Park!is!still!a!buyer’s!market!overall,!homes!at!several! price!points!are!in!short!supply.! !! $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2011 2012 2013 2014 2015 Jan-May Single Family Multi Family Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!39! Residential&Units&Listed&For&Sale,&July&2015& ! &&Town&of& Winter&Park& Balance&of& County& County& Wide& #!of!Listings!!!!!!! Condos&96!119!215! Townhomes&20!58!78! Single&Family&21!322!343! Total&137!499!636! Median!Price!!!!!!! Condos&$240,000!$195,000!$219,000! Townhomes&$609,900!$379,750!$405,300! Single&Family&$1,599,900!$479,950!$499,000! Overall&$363,000!$375,000!$375,000! Median!Price/SF!!!!!!! Condos&$252!$177!$208! Townhomes&$225!$165!$182! Single&Family&$215!$141!$145! Overall&$244!$152!$174! Source:!!MLS! ! The!inventory!of!homes!listed!for!sale!has!decreased!the!most!at!the!lower!end!of!the! market.!Specifically:! ! • Homes!that!have!been!listed!for!several!years!in!the!$500,000!to!$700,000!range! are!now!selling;!singleDfamily!homes!in!this!price!range!would!be!very! marketable.! ! • Homes!priced!at!or!under!$400,000!are!“hot,”!including!townhomes!with! garages.! ! • Bargains!have!disappeared;!there!is!almost!no!inventory!for!sale!under!$200,000.! ! • The!availability!of!singleDfamily!homes!is!especially!limited,!yet!townhomes! priced!around!$500,000!are!still!available.! ! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!40! Home&Prices&and&Attainability& ! Homes!in!Winter!Park!remain!higher!than!elsewhere!in!Grand!County.!SingleDfamily! homes,!which!are!only!a!small!part!of!the!inventory!in!Winter!Park,!are!priced!so!high! ($1.6!million!median!price),!that!the!days!when!a!couple!holding!multiple!jobs!could! afford!to!buy!a!detached!home!with!garage!and!yard!are!in!the!past.!! ! Median&Price&Comparison&of&For&Sale&Listings&in&Grand&County,&CO:&&July&2015! ! !Source:!MLS! ! ! Even!though!prices!have!not!returned!to!previous!peak!levels,!they!are!still!too!high!for! most!workforce!households.!An!income!of!over!$163,000!(or!about!260%!AMI)!is! needed!to!afford!the!average!priced!singleDfamily!home!in!Winter!Park!sold!in!2014.! ! Even!with!prices!that!are!still!much!lower!than!the!preDrecession!peak,!condominiums! do!not!pass!the!standard!attainability!test.!Incomes!of!over!100%!AMI!are!required!to! afford!the!median!price!multiDfamily!unit!listed!for!sale.!! ! !! $240,000 $609,900 $1,599,900 $195,000 $379,750 $479,950 $219,000 $405,300 $499,000 Condos Townhomes Single Family Town of Winter Park Balance of County County Wide Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!41! Average&Price&of&Residential&Homes&Sold&in&Winter&Park,& Income&Needed&to&Afford&Average&Home&Compared&to&Incomes&and&Wages,&2014& !Source:!Land!Title,!HUD,!DOLA,!Consultant!team! ! New!construction!is!not!targeting!the!local!workforce!segment!of!the!market.!Of!the!76! residential!sales!in!January!through!June!2015,!only!4!were!for!new!units.!They!were! modest!in!size,!averaging!about!1,250!square!feet,!but!sold!for!an!average!price!of! nearly!$600,000.! & Ownership&Opportunities&for&the&Workforce& ! LowD,!moderateD!and!even!middleDincome!households!have!very!little!opportunity!to! buy!homes!in!Winter!Park.!! ! While!58!units!were!listed!for!sale!in!late!July!at!prices!attainable!for!households!with! incomes!equal!to!or!less!than!120%!AMI,!56!were!condominiums!that!are!not! appropriate!for!year!round!residents!due!to:! ! • HOA!dues!DD!an!average!of!$398!per!month;! • Age!–!lowerDend!units!were!built!primarily!in!the!70’s;! • Design!–!insufficient!storage!and!no!garages;!and! $614,620 $256,415 $163,250 $69,200 $76,000 $76,000 $31,600 $31,600 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 Single Family Multi Family Ho u s e h o l d I n c o m e s a n d W a g e s Av e r a g e S i n g l e F a m i l y H o m e S a l e P r i c e Average Sale Price Income needed to afford average home Median household income (County) Average wage (County) Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!42! • Financing!–!limited!mortgage!availability,!as!explained!later!in!this!section.! ! MLS&Listings&in&Winter&Park:&&July&2015& &&&&AMI& &&Total&Units&≤50%&50.1%&5&80%&80.1%&5120%&>120%& Maximum&Price*& $115,684!$185,206!$277,642!>$277,642! Total&Listings&137!11!16!31!79 Condos&96!10!16!30!40! Townhomes&20!1!0!0!19! Single&Family&21!0!0!1!20! Percent&of&Total&100%!8%!12%!23%!58%! Source:!!MLS! *Assumes!2Dperson!households!qualifying!for!a!30Dyear!fixedDrate!mortgage!! at!5.5%!with!a!5%!down!payment.! ! Deed&Restricted&Sales& ! Hideaway!Junction!and!Miller’s!Inn!provide!ownership!opportunities!for!households! with!at!least!one!member!employed!in!the!local!workforce.!Since!both!projects!are!small! with!little!turnover,!the!opportunities!have!been!very!limited,!however.!In!the!past!five! years!(2010!through!2014):! ! • 8!of!the!10!units!at!Hideaway!Junction!were!sold!for!an!average!price!of! $240,250,!similar!to!original!prices!on!the!units!due!to!discounting!by!the!Town! of!Winter!Park.!! ! • 2!of!the!nine!units!at!Miller’s!Inn!resold!for!an!average!price!of!$176,207.! ! Combined,!these!sales!average!only!two!units!per!year.! & Deed&Restricted&Sales& &&Hideaway&Junction&Miller’s&Inn& Total&Units&10!9! Units&Sold&!! 2010!3!1! 2011!1!! 2012!0!1! 2013!3!! 2014!1!! Average&Price&$240,250!$176,207! Source:!Grand!County!Assessor! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!43! Hideaway!Junction!has!been!popular!and!is!occupied!mostly!by!local!professionals!and! essential!service!providers!–!a!teacher!and!other!school!district!personnel,!police,!Town! staff,!physical!therapist,!ski!patroller,!store!manager!and!resort!employees.! ! Miller’s!Inn!is!home!to!a!variety!of!service!providers!–!ski!instructor,!retail!and! restaurant!employees,!Town!staff,!construction!workers,!property!managers,! maintenance!workers!and!housekeepers.! ! While!turnover!has!been!low!at!Miller’s!Inn,!one!unit!was!recently!listed!for!sale!and!is! now!under!contract.!The!slow!increase!in!AMI!reported!in!the!Demographic!section!is!an! issue!at!Miller’s!Inn.!Units!are!permitted!to!appreciate!up!to!3%!per!year,!whereas!HUD! incomes!have!increased!an!average!of!only!2%!or!less!per!year!since!2005.!This!means! that!for!owners!to!receive!their!full!appreciation!value,!current!sale!prices!would!be! higher!than!households!earning!115%!AMI!can!afford!–!the!income!group!that!the!nine! units!are!intended!to!serve.!! & Buyer&Profile& ! The!ownership!housing!market!in!Winter!Park!is!heavily!dominated!by!second!home! buyers.!Only!5%!of!residential!sales!in!2014!were!to!buyers!with!local!addresses.!Of! Winter!Park’s!second!home!buyers,!an!unusually!high!proportion!live!on!the!Front! Range,!though!realtors!noted!this!appears!to!be!declining!slightly!due!to!an!increase!in! purchases!by!international!residents!and!other!states.! ! • Few!units!are!being!purchased!by!investors.!ShortDterm!rents!are!not!high! enough!for!them!to!obtain!a!sufficient!return!on!their!investment.! ! • Retirees!who!purchase!generally!fall!within!the!second!home!owner!category! looking!primarily!for!a!summer!residence;!although!some!may!move!to!the!area! full!time!to!be!near!children/grandchildren!living!in!Grand!County!or!in!the! Denver!area.! ! • Families!who!live!in!the!community!all!or!most!of!the!time,!but!with!highDpaying! jobs!elsewhere!or!income!from!other!resources,!are!purchasing!homes!around!or! above!$700,000!and!do!not!compete!with!local!employees!for!homeownership.!! ! The!size!of!the!local!employee!homebuyer!market!is!small.!In!2014,!only!9!residential! units!out!of!180!sold!in!Winter!Park!were!purchased!buyers!from!Grand!County.!The! profile!of!local!residents!who!buy!in!Winter!Park!reflects!little!diversity:! ! • About!half!are!first!time!buyers!and!half!are!moving!up!from!a!smaller/less! expensive!home.!Owners!rarely!cash!out!of!larger!homes!and!move!into!lower! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!44! cost/lower!maintenance!units.!MoveDup!buyers!generally!look!for!homes!priced! up!to!$400,000.! ! • Approximately!70%!are!longtime!residents!of!Winter!Park,!20%!are!employees! who!have!been!commuting!in!for!work!and!only!10%!are!new!to!the!area.! ! • Most!are!younger!singles!and!couples,!though!some!small!families!with!children! have!purchased!in!Winter!Park.!The!lack!of!an!elementary!school!in!Winter!Park! has!deterred!families!with!young!children!from!purchasing!in!the!town;! although,!if!a!charter!school!is!started!as!is!now!being!discussed,!this!may! change.! ! • Longtime!residents!have!not!been!moving!up!valley!even!after!becoming!empty! nesters!because!they!have!become!ingrained!in!Granby!and!other!communities,! and!because!one!or!more!household!members!may!not!work!in!Winter!Park.! ! Fraser!is!preferred!as!a!place!to!live!by!many!employees!who!work!in!Winter!Park!and! want!to!live!up!valley!with!only!a!short!commute.!Lower!home!prices,!greater!choice!in! type!of!housing,!schools,!a!grocery!store,!and!other!retail!and!commercial!services!all! contribute!to!Fraser’s!attractiveness!over!Winter!Park!for!many!buyers.! ! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!45! Local&Buyer&Preferences& ! Residents!generally!have!few!demands!when!seeking!homes!to!purchase.! ! • Price!is!the!single!biggest!factor.!Residents!who!hold!jobs!in!the!area!and!are! dependent!upon!local!wages!can!typically!only!afford!homes!in!the!$200,000!to! $300,000!price!range.!A!few!can!afford!to!move!up!into!more!expensive!homes!if! they!have!owned!for!a!long!time!and!accumulated!equity.!! ! • Most!prefer!singleDfamily!homes,!but!with!little!to!no!inventory!of!homes!for! sales!in!their!price!range,!many!have!compromised!and!purchased!townhomes! or!condominiums!if!storage!was!adequate.! ! • A!garage!tops!the!list!of!amenities!preferred.!Realtors!agree!that!townhomes! would!be!marketable!to!workforce!households!if!they!included!garages.! ! • TwoDbedroom!units!are!popular,!yet!the!threeDbedroom!units!at!Hideaway! Junction!were!preferred!by!buyers!–!a!choice!that!should!be!explored!further! when!planning!future!phases!for!the!development.! ! • Locals!prefer!convenient!neighborhoods!close!to!town!but!often!have!little! choice!and!will!compromise!on!location.!! ! Downvalley&Conditions& ! The!low!end!of!the!market!has!also!tightened!downvalley!with!prices!rising!in! communities!where!locals!comprise!a!large!segment!of!the!market.!! ! • The!median!price!of!homes!listed!for!sale!does!not,!however,!adequately!reflect! the!difference!in!prices!between!Winter!Park!and!other!Grand!County! communities!due!to!variation!in!the!type!of!units.!The!median!price!is!actually! higher!in!Fraser!and!about!the!same!in!Grand!Lake!where!there!are!more!single! homes!listed!for!sale!than!in!Winter!Park,!where!most!units!are!condominiums.!! ! • The!median!price!per!square!foot!reveals!a!significant!price!differential.!Homes! are!a!much!better!value!outside!of!Winter!Park.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!46! Median&Listing&Price&and&Price&per&Square&Foot&by&Community! !Source:!MLS! & Mortgage&Availability& ! For!singleDfamily!homes!and!townhomes,!conventional!and!governmentDbacked! mortgages!are!readily!available!at!competitive!rates.!Condominium!financing,!however,! is!problematic.!Since!the!mortgage!melt!down!of!2008,!the!industry!has!gone!through! many!changes!that!have!limited!condominium!financing!primarily!to!portfolio!loans!(i.e.,! loans!not!sold!on!the!secondary!market).!These!changes!include:! ! • Enforcement!of!underwriting!criteria!on!the!number!of!shortDterm!rentals!that! can!be!located!within!the!project;! • Prohibition!of!any!onDsite!rental!offices!–!looks!too!much!like!a!condoDhotel!to! lenders;! • Tight!limits!on!the!amount!of!commercial!space!that!can!be!within!the!project;! • No!more!“spot”!loans!by!FHA,!USDA!and!VA!in!projects!that!are!not!approved;!no! condominium!projects!in!Winter!Park!are!approved!for!these!governmentD backed!loan!programs.! ! Numerous!lenders!are!active!in!Grand!County.!No!one!mortgage!company!or!bank! dominates.!Wells!Fargo!tops!the!list!of!lenders!in!2015!with!10%!of!the!loans!closed!in! the!first!five!months!of!2015.!This!provides!a!wide!selection!of!loan!products!and! competitive!terms!for!single!family,!duplex!and!townhome!units.! !! ! $363,300 $400,900 $358,900 $338,000 $244 $196 $143 $141 $0 $50 $100 $150 $200 $250 $300 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 WINTER PARK FRASER GRAND LAKE GRANBY Median Price Median PPSF Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!47! SECTION&5&–&RENTAL&MARKET&CONDITIONS& ! Rental&Inventory& ! About!42%!of!households!in!Winter!Park!rent!their!homes.!Rentals!in!Winter!Park!are! primarily!individually!owned!condominiums,!townhomes!and!other!attached!product! managed!by!their!owners.!Relatively!few!units!are!leased!through!professional!property! managers.! ! Renter5Occupied&Households:&&Winter&Park,&2010&to&2020&(projected)& &&2010&2015&2020& Total&Households&481!499!562! RenterDoccupied!204!212!238! Source:!2010!US!Census,!DOLA!projections!(Grand!County),!Consultant!team! ! The!only!apartment!property!in!Winter!Park!is!Miller’s!Inn,!which!is!a!small!sixDunit! complex!with!only!studio!and!oneDbedroom!units.!! ! Age/Condition&of&Units& ! An!estimated!85%!of!rented!properties!in!Winter!Park!were!built!prior!to!1990.!! ! • One!predominate!property!management!company!manages!about!70!units!for! owners!leasing!their!homes!in!the!Fraser!Valley,!reports!about!70%!of!their! Winter!Park!properties!were!built!in!the!1980’s!or!earlier.!! ! • Apartment!property!managers!in!Fraser!noted!increased!incidence!of!new! tenants!complaining!that!their!prior!ownerDmanaged!rental!was!not!well! maintained!and!that!owners!were!slow!to!respond!to!needed!repairs.!Employers! noted!a!similar!rise!in!complaints!from!their!employees!regarding!rented! accommodations!in!recent!years.! ! • Both!Wapiti!Meadows!and!Fox!Run!are!reported!to!be!in!good!shape.!Fox!Run! underwent!significant!renovations!since!initial!construction!and!the!new!owner! has!continued!doing!improvements.!Both!projects!have!management!on!site!to! address!needed!repairs.!! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!48! Vacancy&Rates&& ! Vacancy!rates!vary!by!season!and!property!type!although!market!conditions!have! tightened!across!the!board.! ! • There!are!no!vacant!units!in!the!attainable!rentals!projects!(Wapiti!Meadows!and! Miller’s!Inn).!Wapiti!Meadows!had!13!units!turnover!in!the!year!2013;!six!units! turnover!in!2014!and!only!three!units!turnover!so!far!this!year.!The!project!has! been!consistently!over!95%!occupied!the!past!two!years.!Miller’s!Inn!has!about! two!units!turnover!each!year!–!their!smaller!studios.!The!project!remained!full! during!the!recession.! ! • Of!70!units!managed!by!a!local!property!management!company!in!the!Winter! Park!to!Granby!area,!9!were!vacant!in!June!(13%!vacant)!–!one!of!which!is!in! Winter!Park!and!six!in!Fraser.!! ! • Fox!Run!apartments!had!4!vacant!units!(6%!vacant)!–!these!have!been!vacant! since!April.!! ! • Only!two!nonDapartment!homes!were!listed!for!rent!in!Winter!Park!on!Craigslist! for!either!the!winter!season!or!a!yearDround!lease;!four!were!available!in!Fraser.! ! Vacancy&Rates:&&Winter&Park&and&Fraser,&August&2015& &Winter&Park&Fraser& Attainable&rentals&0%!0%! Condo,&TH,&Single5Family&rentals&1%!(3!units)!4%! Market5rate&apartments&NA!6%! Source:!!Craigslist;!Interviews;!consultant!team! ! Turnover!primarily!occurs!in!May!and!October!of!each!year.!Vacant!units!in!October!fill! up!quickly,!whereas!units!are!typically!slow!to!fill!in!the!summer!and!vacancy!rates! always!increase.!! ! Last!year!was!the!first!year!since!the!recession!that!a!significant!number!of!workers! could!not!find!housing!in!the!winter.!Several!camped!in!their!cars.!! ! The!inventory!this!summer!of!vacant!units!is!unusually!small,!meaning!next!winter!is! shaping!up!to!be!a!tighter!rental!market!than!last!winter.! ! • Vacancies!went!from!zero!and!waitlists!in!the!winter!up!to!about!30%!in!May! when!winter!workers!vacated.!Both!apartment!and!nonDapartment!property! managers!noted!that!their!units!leased!up!faster!this!summer!than!in!past!years! –!at!least!since!the!recession!–!and!that!they!are!full!of!yearDround!lease!holders.!! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!49! ! • One!property!manager!had!10!units!lease!up!in!May!with!yearDround!tenants.!It! has!been!five!years!since!he!has!leased!up!units!in!May!(i.e.,!preDrecession).! ! • The!manager!of!Fox!Run!noted!that!last!summer!she!had!30%!of!units!vacant! through!the!summer!(20!units!total),!which!then!leased!up!in!the!winter.!This! summer!she!only!has!4!twoDbedroom!units!available.!! ! • Seasonal!worker!housing!reserved!through!either!master!leases!or!business! ownership!can!be!up!to!50%!vacant!in!the!summer!months.!Leasing!units!to! other!businesses!with!summer!employees!helps!to!fill!these!units,!but!requires! communication!and!collaboration.! ! • Winter!Park!Resort!master!leases!30!twoDbedroom!units!at!Fox!Run!as!of!last! spring!–!only!4!(13%)!are!presently!vacant.!The!master!leased!units!have!helped! boost!summer!occupancy!at!this!property.! & Rents& & Rents!of!condominiums,!townhomes,!and!single!family!homes!have!been!rising!since!the! recession!in!the!Winter!Park!area.!Based!on!an!inventory!of!44!occupied!and!vacant! rental!units!in!Fraser!and!Winter!Park,!rents!average!over!$800!for!a!oneDbedroom!and! up!to!$1,700!or!more!for!a!threeDbedroom!home.!These!rents!are!affordable!for! households!earning!from!60%!up!to!110%!AMI.! ! Of!units!available!midDAugust,!the!average!rent!asked!in!Winter!Park!is!$1.74!per!square! foot!compared!to!$1.13!in!Fraser.! ! Average&Non5Apartment&Rents:&&Winter&Park&and&Fraser,&2015& &Winter&Park&Fraser& 15bedroom&$841!(60%!AMI)!$808! 25bedroom&$1,175!(80%!AMI)!$1,243! 35bedroom&$1,860!(110%!AMI)!$1,700! Average&rent&per&square&foot&& (available&units&only)& $1.74!$1.13! Source:!!Craigslist!(Aug.!17,!2015);!www.resortsofgrandcounty.com;!consultant!team! ! Apartment!rents!have!also!been!increasing.!Wapiti!Meadows!was!asking!unsustainably! low!rents!six!years!ago,!but!is!now!able!to!charge!near!the!maximum!permitted!LIHTC! rents!for!each!income!range.!Fox!Run!rents!have!also!been!increasing!the!past!few! years.! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!50! • The!only!market!rate!apartment!complex!in!the!area!is!Fox!Run.!Rents!average! about!$1.63!per!square!foot.!These!rents!include!all!utilities,!including!WIFI!and! Direct!TV.!! ! • The!incomeDrestricted!rentals!at!Wapiti!Meadows!range!from!$0.69!up!to!$1.05! per!square!foot.! ! • Rentals!at!Miller’s!Inn,!which!are!restricted!for!occupancy!by!employees!working! in!Grand!County,!average!$1.12!per!square!foot.! ! Apartment&Rents:&&Winter&Park&and&Fraser,&2015& &Fox&Run&& (Market&Rate)& Wapiti&Meadows&& (LIHTC)& Miller's&Inn& (Employee&restricted)& & Units&Rent&Units& 40%& AMI& 50%& AMI& 60%& AMI&Units&Rent& 15bedroom&14!$975!4!$498!$644!$790!6!! (2!studios)! $400D $675! 25bedroom&46!$1,350!26!$605!$780!$956!0!D! 35bedroom&4!shortDterm! rented! 20!$811!$906!$1,109!0!D! Avg.&rent&& per&sq.&ft.& D!$1.63!D!$0.69!$0.85!$1.05!D!$1.12! Source:!!Interviews;!consultant!team! & Occupancy&Trends&and&Renter&Characteristics& & Each!apartment!complex!has!unique!occupancy!patterns!and!trends:! ! Fox&Run.&This!property!is!set!up!to!accommodate!seasonal!shifts,!although!yearDround! leases!are!preferred.!Tenants!receive!one!month!of!free!rent!as!an!incentive!to!sign!oneD year!leases.!Utilities,!WIFI!and!TV!are!included!in!rent!to!avoid!changeover!of!utilities! with!new!tenants!and!simplify!the!moveDin/moveDout!process.! ! Winter!Park!Resort!began!master!leasing!30!twoDbedroom!units!in!Fox!Run!in!May!2014.! As!part!of!the!master!lease!agreement,!Fox!Run!must!provide!transportation!for!resort! workers!to!their!jobs.!Fox!Run!contracts!with!the!local!bus!service!in!the!winter!for! $3,000!per!month!to!provide!this!service!and!runs!a!selfDoperated!van!in!the!summer.! These!30!units!currently!house!a!range!of!Winter!Park!Resort!employees,!from!human! resources!to!bike!patrol.!! ! OneD!and!twoDbedroom!units!may!be!leased!yearDround!or!for!sixDmonths.!Only!one!is! occupied!by!a!family!with!children.!All!other!units!are!occupied!by!single!adults!and! roommates!ranging!from!age!21!to!59!and!about!25%!are!occupied!by!couples.!Most! occupants!work!for!Winter!Park!Resort!or!Devil’s!Thumb!Ranch,!plus!a!couple!of!housing! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!51! maintenance!workers!(painters,!window!washers,!etc.).!Many!have!been!in!their! apartments!for!2!or!more!years.! ! The!threeDbedroom!units!are!leased!on!a!shortDterm!basis!to!visitors!throughout!the! year!through!VRBO!and!Airbnb!for!$99!per!night!Sunday!through!Thursday!and!$250!per! night!on!Friday!and!Saturday.!! ! Wapiti&Meadows.&Tenants!in!Wapiti!Meadows!typically!stay!several!years,!averaging! from!4!to!5!years,!with!some!having!occupied!their!units!for!over!10!years.!The!complex! offers!oneDyear!leases!only,!but!did!6Dmonth!leases!a!few!years!ago!when!units!were! hard!to!fill.!Seasonal!turnover!in!LIHTC!units!is!management!intensive!given!tenant! qualification!requirements.! ! Occupants!are!primarily!middleDaged!working!class!families!with!children!and!some! single!parent!households.!TwoDincome!couples!often!earn!too!much!to!incomeDqualify! for!their!units.!Many!tenants!are!employed!by!Winter!Park!Resort,!Safeway!and!other! retail/!restaurants!in!the!area.!The!lack!of!yearDround!transportation!adversely!impacts! their!tenants.! ! Miller’s&Inn.&Occupants!are!mostly!singles!and!occasionally!a!couple.!At!least!oneDhalf!of! tenants!have!been!in!the!property!for!10!years!or!more.!Current!occupants!work!at!local! restaurants/shops,!one!is!a!yoga!instructor!and!another!is!in!property!maintenance.!! ! Availability&–&Units&Listed&For&Rent& ! About!40%!of!rentals!available!in!Winter!Park!and!Fraser!would!be!affordable!to! households!earning!over!100%!AMI.!None!are!available!for!workers!earning!under!50%! AMI!–!entry!level!workers!earning!$10!to!$15!per!hour.! ! Available&Rentals&by&AMI&Affordability:&&& Winter&Park&and&Fraser,&August&2015& &Maximum& Affordable&Rent& Units& Available& <50%&AMI&$780!0! 50580%&AMI&$1,250!2! 805100%&AMI&$1,560!6! 1005120%&AMI&$1,870!2! Over&120%&AMI&Over!$1,870!3! TOTAL&D!13! Source:!Interviews,!Craigslist,!www.resortsofgrandcounty.com,!consultant!team! ! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!52! Competition&for&Local&Rentals& ! Factors!on!both!the!supplyDside!and!demandDside!for!rentals!have!contributed!to!the! increased!occupancy!of!rentals!this!summer!–!and!the!decreased!availability!in!the! coming!winter:! ! • Now!that!home!prices!have!started!to!recover,!rentals!are!being!lost!to!the!forD sale!market.!Employers!noted!that!several!of!their!employees!occupy!units!that! owners!have!for!sale.!One!property!manager!lost!five!units!this!year!because! owners!sold!their!homes.!Most!of!these!units!are!purchased!by!outDofDarea! owners!who!are!not!renting!their!homes.! ! • ShortDterm!rentals!have!increased!at!the!Winter!Park!mountain!base!area!in! recent!years!with!sites!like!VRBO,!reducing!seasonal!rentals!for!workers.!ShortD term!rentals!are!not!as!prevalent!in!town.!They!cannot!compete!with!baseDarea! prices.! ! • Workers!are!coming!to!the!area!wanting!more!yearDround!leases!compared!to! prior!years.!This!year!is!the!most!new!workers!that!property!managers!have!seen! since!the!recession!five!years!ago.!Construction!workers,!service!workers!and! workers!related!to!the!marijuana!industry!were!most!noted.! ! • Front!Range!renters!tired!of!the!traffic!have!leased!more!units!than!in!prior!years! for!the!winter!season.!A!nonDapartment!property!manager!leased!a!few!units!to! Front!Range!renters!last!year,!but!it!is!prevalent!this!year.!Fox!Run!has!a!waitlist! of!winter!seasonal!renters,!many!of!which!are!Front!Range!skiers,!but!provides! preference!to!yearDround!renters!that!lease!units!before!the!winter!season! begins.!Fox!Run!had!no!Front!Range!renters!last!year.! ! Renter&Preferences&and&Needs& ! A!few!patterns!emerged!from!an!analysis!of!property!manager!and!employer!interviews! along!with!apartment!pricing!and!vacancy!information:! ! • Pets!are!popular.!Fox!Run!and!Wapiti!Meadows!allow!pets.!OwnerDrented!units! are!more!challenging!–!many!HOA!covenants!do!not!allow!renters!to!have!pets.! A!property!manager!of!nonDapartment!units!noted!that!“pets!are!where!the! money!is,”!meaning!units!allowing!pets!are!typically!the!first!to!be!leased.! ! • Units!renting!for!about!$500!per!bedroom!are!in!demand.!Employers!noted! these!are!needed!by!their!entry!workers!earning!$10!to!$15!per!hour.!A!local! property!manager!has!received!several!calls!per!day!this!summer!from!tenants! seeking!petDfriendly!units,!priced!around!$1,000!for!a!twoDbedroom.! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!53! ! • Rentals!priced!for!twoDincome,!twoDperson!households!earning!over!60%!but! below!100%!AMI!are!needed.!These!households!cannot!qualify!for!LIHTC!units,! yet!can!only!afford!older!marketDrate!units!that!are!often!in!poor!repair,!if! available.! ! • Almost!all!employers!stated!their!seasonal!and!entryDlevel!workers!would!prefer! to!live!in!Winter!Park!if!rentals!they!could!afford!were!available.!These!workers! are!mostly!singles!and!a!few!couples!–!very!few!if!any!have!children.! ! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!54! SECTION&6&–&HOUSING&NEEDS&AND&PREFERENCES& ! This!section!of!the!report!estimates!the!total!number!of!housing!units!needed!to! support!job!growth,!sustain!businesses!and!meet!resident!needs!in!the!Town!of!Winter! Park!through!2020.! ! First,!average!yearDround!workforce!housing!needs!are!presented!and!is!divided!into! two!categories:! ! • Current&Conditions&and&Needs,!which!summarizes!the!current!number!of! households!occupied!by!local!workers!and!presents!options!for!the!Town!to! consider!increasing!this!ratio!upon!establishing!housing!goals!for!the!Town.! Currently!22%!of!the!Winter!Park!workforce!lives!in!Town!and!the!number!of! units!need!to!raise!this!to!30%!of!workers!are!provided.! ! • Future&(or&Keep5Up)&Needs,!which!includes!housing!needs!generated!by!job! growth!through!2020!both!under!the!current!status!scenario!(22%!of!workers! housed)!and!for!a!potential!higher!percentage!of!workers!living!in!Town!(30%!of! workers!housed).! ! Second,!seasonal!housing!needs!are!discussed.!This!segment!of!the!workforce!has! unique!needs!and!considerations!that!need!to!be!made!when!providing!housing!for!this! segment!of!the!workforce.! ! Current&Conditions&and&Needs& ! All!indicators!suggest!there!is!current!demand!for!additional!workforce!housing!in! Winter!Park.!High!rental!occupancy!levels,!small!inventory!of!homes!for!sale,!employer! interviews,!and!applications!for!Hideaway!Junction!are!all!evidence!of!the!need!to!build! additional!units.!In!Winter!Park,!however,!as!in!comparable!communities,!sufficient! housing!cannot!be!developed!at!attainable!prices!by!the!market!to!address!all!potential! demand.! ! Winter!Park!has!yet!to!establish!specific!goals!for!its!attainable!housing!program.!Many! mountain!resort!towns!base!their!plans!and!strategies!for!development!of!attainable! housing!on!housing!a!percentage!of!their!workforce.!For!example,!Vail’s!goal!is!30%,! Breckenridge!established!a!goal!of!47%,!and!Jackson!Hole!adopted!a!Comprehensive! Plan!goal!for!housing!65%!of!their!workforce.!This!is!what!these!communities!feel!they! need!to!sustain!their!economies!and!to!preserve!or!create!the!towns!that!they!desire.!As! Winter!Park!provides!more!attainable!housing!and!increases!its!resident!base,!the!ratio! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!55! of!the!workforce!housed!may!need!to!be!revisited!and!change!in!light!of!community!and! business!goals!and!resident!demand!for!housing.! ! Winter!Park!now!houses!approximately!22%!of!its!employees!on!average!year!round! (320!households).!To!house!30%!of!existing!employees,!approximately!110!additional! units!are!needed.!This!assumes!that!each!unit!would!house!1.84!workers!on!average,! and!that!employees!would!hold!1.2!jobs!on!average.! ! Current&Condition&Compared&to&Current&Needs& Current&condition& (22%&of&workers&housed)&2015&Alternative& (30%&of&workers&housed)& 3,175!Average!jobs!in!Winter!Park!3,175! 1.2!Jobs!per!worker!1.2! 2,650!Workers!needed!to!fill!jobs!2,650! 22%&%&living&in&Winter&Park&30%& 590!#!living!in!Winter!Park!800! 1.84!Workers!per!household!1.84! 320&Locally&employed& households&430& ! & Future&(Keep5Up)&Needs& & To!keep!up!with!estimated!job!growth,!another!40!housing!units!will!be!needed!to! retain!22%!of!local!workers!in!town!by!2020.!If!the!goal!is!to!house!30%!of!the!workforce! locally,!an!additional!50!housing!units!affordable!for!local!workers!will!be!needed!in!the! next!five!years.!These!figures!are!likely!conservative!because!they!do!not!take!into! consideration!retiring!employees,!whose!jobs!will!need!to!be!filled!by!new!workers.! ! Estimate&of&Housing&Needed&to&Fill&New&Jobs,&2015&–&2020& &&Current&Condition& (22%&of&workers& housed)& Alternative&& (30%&of&workers& housed)& Increase&in&Jobs&through&2020!370!370! Jobs&per&Employee!1.2!1.2! New&Employees&Needed!310!310! Employees&housed&in&Winter&Park!70!90! Employees/Housing&Unit&1.84&1.84& New&housing&needed&40&50& ! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!56! Needs&by&Own/Rent&and&AMI& ! There!is!need!for!both!ownership!and!rental!housing!in!the!town!of!Winter!Park!that!is! affordable!for!the!local!workforce.!Presently!about!58%!of!resident’s!homes!in!Winter! Park!are!ownerDoccupied.!The!below!estimates!retain!the!current!mix!of!owners!and! renters!in!the!town,!but!the!precise!ratio!is!somewhat!dependent!upon!the!desired! direction!and!policy!of!the!Town.!While!the!rental!market!is!currently!tighter!than!the! ownership!market!and!has!a!stronger!postDrecession!recovery,!ownership!is!needed!long! term!for!year!round!residents.!! ! Summary&of&Housing&Needs&by&Own/Rent&Through&2020& &Current&Condition& (22%&of&workers& housed)& Alternative& (30%&of&workers& housed)& Units&needed&through&2020&40&160& Ownership'25!90! Rental!15!70! ! ! Ownership!products!should!be!evenly!distributed!at!price!points!ranging!as!low!as! $120,000!up!to!about!$325,000!(50%!through!140%!AMI).!A!similar!percentage!of!owner! households!earn!within!each!AMI!category!in!this!range.!The!Town!should!consider! providing!between!6!to!nearly!25!units!in!each!income!category!over!the!next!five!years,! totaling!between!25!to!90!units!depending!upon!Town!goals.!! ! • Neither!home!sales!in!2014!nor!current!inventory!are!providing!needed!products! in!this!price!range!for!locals,!whereas!homes!affordable!to!households!earning! over!140%!AMI!are!over!supplied!for!locals.!! ! • Homes!affordable!for!households!earning!under!50%!AMI!are!also! undersupplied;!however,!producing!homes!at!this!price!will!not!occur!without! substantial!subsidies!or!will!require!programs!such!as!Habitat!for!Humanity.! These!households!also!have!trouble!qualifying!for!loans!and!meeting!down! payment!purchase!requirements.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!57! Homeowner&Income&Distribution&Compared&to&Homes&Sales&and&Availability& AMI&Range&Maximum& Affordable& Sale&Price& Owner& Income& Distribution& 2014& SF/TH/Dup& Sales*& Current& SF/TH/Dup& Listings*& <50%&$115,700!12%!5%!2%! 50%&to&80%&$185,200!12%!2%!0%! 80.1&to&100%&$231,400!9%!5%!0%! 100.1&to&120%&$277,600!14%!3%!2%! 120.1&to&140%&$323,900!11%!3%!2%! Over&140%&Over!$323,900!42%!82%!93%! TOTAL&D!100%!100%!100%! *Sales!exclude!condominium!listings.!As!discussed!in!other!sections!of!this!report,!multiple!factors!make! condominiums!largely!unsuitable!for!ownership!occupancy!by!locals,!particularly!existing!product!–!see! Section!3!–!Homeownership!Market!Conditions!and!Section!2!–!Housing!Inventory!(Ownership).! ! Rentals!should!be!evenly!distributed!among!households!earning!under!50%!AMI!and! between!50!and!80%!AMI.!These!would!be!units!priced!below!$1,250!per!month!for!a!2D person!household.!A!similar!percentage!of!renter!households!earn!within!each!AMI! category!in!this!range.!The!town!should!consider!providing!between!about!7!up!to!35! units!in!each!income!category!over!the!next!five!years,!totaling!between!15!to!70!units! depending!upon!Town!goals! ! • None!of!the!available!rentals!are!affordable!to!households!earning!under!50%! AMI!and!rentals!between!50!to!80%!AMI!are!undersupplied.! ! Renter&Income&Distribution&Compared&to&Available&Rentals& Maximum& Affordable&Rent& Renter&Income& Distribution& Available& Rentals*& <50%&AMI&$780!28%!0%! 50580%&AMI&$1,250!27%!15%! 805100%&AMI&$1,560!14%!46%! 1005120%&AMI&$1,870!6%!15%! Over&120%&AMI&Over!$1,870!25%!23%! TOTAL&D!100%!13! *Available!rentals!include!rentals!available!in!Winter!Park!and!Fraser!in!August!2015.! ! Housing&Preferences& ! Hideaway!Junction!applicants!provide!a!benchmark!for!some!of!the!ownership!demand.! Their!characteristics!and!preferences!also!generally!tracks!information!provided!by! realtors!and!employers:! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!58! ! • The!large!majority!already!live!in!the!vicinity!–!13!in!Winter!Park!and!an!equal! number!in!Fraser.!Of!the!few!households!who!live!downvalley,!half!were!from! Granby.! ! • Most!are!longDterm!residents.!Half!have!lived!in!the!area!for!10!or!more!years.!! ! • They!hold!all!types!of!jobs!–!restaurant,!real!estate,!resort!and!government.! ! • They!generally!want!townhomes!or!singleDfamily!homes.!Only!two!applicants! since!2012!would!consider!a!condominium.! ! • When!they!were!placed!on!the!list,!their!average!housing!payment!was!$1,100! per!month;!equivalent!to!a!mortgage!on!a!$165,000!home.! ! • About!1/3!now!own!their!homes.!OneDhalf!of!owners!are!interested!in!buying!a! townhome!with!threeDbedrooms.! ! • Of!the!households!that!rent,!twoDthirds!are!interested!in!buying!a!twoDbedroom! unit.!! ! • About!85%!have!three!or!fewer!persons!in!their!household.!About!55%!desire!a! threeDbedroom!home!and!45%!want!twoDbedrooms.!About!oneDthird!need! access!to!day!care,!or!will!in!the!near!future.! ! In!addition,!a!few!business!owners!and!upperDlevel!management!positions!with!the!ski! area!are!also!interested!in!purchasing!homes!in!Winter!Park.!These!households!could! afford!homes!nearer!the!$300,000!to!$350,000!range!and!are!generally!middleDaged! couples!either!with!older!children!or!without!children!at!home.! ! Rentals!priced!below!80%!AMI!will!be!primarily!for!oneD!and!twoDperson!households,! mostly!targeting!singles!and!some!young!couples:! ! • Households!earning!below!50%!AMI!include!entry!level!and!service!workers! earning!$10!to!$15!per!hour.!! ! • Households!earning!up!to!80%!AMI!includes!twoDincome!households!that!cannot! income!qualify!for!LIHTC!units!and!young!professionals!earning!near!$25!per! hour.! ! • Renters!want!pets.!Renters!also!want!their!units!to!be!kept!well!maintained!and! in!good!repair.!A!wellDmanaged!apartment!complex!avoids!HOA!restrictions!that! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!59! prohibit!renters!to!have!pets!and!ensures!repairs!are!completed!in!a!timely! manner.! ! Seasonal&Housing& ! This!winter,!over!2,000!seasonal!workers!will!be!needed!in!Winter!Park!to!fill!jobs!both! with!smaller!inDtown!employers!and!at!the!Resort.!Seasonal!worker!housing!is!treated! separate!from!yearDround!housing!needs!discussed!above.!This!is!a!different!product! and!requires!different!considerations.!In!a!winterDheavy!employment!environment!like! Winter!Park,!it!can!be!expected!that!many!of!the!units!will!remain!vacant!through!the! summer!absent!alternative!avenues!for!filling!them.!The!lack!of!consistent!yearDround! rent!revenue!means!units!cannot!typically!be!built!nor!maintained!without!significant! subsidies.! ! In!general:! ! • Almost!twoDthirds!(63%)!of!the!seasonal!employees!will!be!filled!by!repeat! seasonal!workers!–!workers!that!take!these!jobs!in!consecutive!seasons.!This! means!that!about!700!workers!will!need!to!be!newly!recruited!to!fill!positions.! ! • These!units!should!be!designed!for!lowDcost,!shortDterm!occupancy!–!dorm!style! units!with!bedrooms!that!can!be!rented!individually,!shared!kitchens,! compartmentalized!bathrooms!and!storage!lockers.! ! • As!with!yearDround!renters,!seasonal!renters!are!increasingly!desiring!pets,! adding!to!their!housing!challenge.! ! • Larger!employers,!including!Devil’s!Ranch!and!Winter!Park!Resort,!have!added!to! their!supply!of!housing!for!seasonal!workers!over!the!past!year.!Winter!Park! Resort!is!continuing!to!explore!options!for!increasing!housing!for!this!segment!of! the!workforce.!These!employers!have!the!best!understanding!of!this!market!and! the!number!of!units!needed!in!the!future.! ! • The!lack!of!transportation!in!the!area!poses!challenges!for!housing!this! population.!Even!with!adequate!transportation!upD!and!downvalley,!the!best! location!for!housing!seasonal!workers!is!typically!at!or!near!their!place!of! employment!–!e.g.,!the!Resort!base!or!at!Devil’s!Ranch!grounds!–!both!from!a! housing!preference!standpoint!and!for!employment!convenience.!Seasonal! resort!worker!housing!does!not!mix!well!in!established!local!neighborhoods!or! with!local!families.!! !!! The!number!of!units!needed!to!accommodate!seasonal!workers!who!typically!live!six! months!or!less!in!the!area!is!highly!volatile.!It!varies!depending!up!the!economy.!During! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!60! the!recession,!seasonal!jobs!at!ski!resorts!were!almost!all!filled!by!year!round!residents! who!were!un/under!employed.!Seasonal!worker!housing!had!high!vacancies.!! ! Because!of!the!high!subsidies!required,!the!ski!corporations!typically!provide!the!bulk!of! seasonal!worker!housing.!Towns!and!counties!seldom!adopt!goals!and!strategies! specifically!for!seasonal!workers.!Too!much!dependence!on!the!seasonal!worker!flow!in! and!out!of!the!community!does!not!enhance!economic!sustainability!and!community! character.! ! As!the!economy!diversifies!over!time!and!through!the!efforts!now!underway!to!create! an!economic!development!plan!for!the!Fraser!Valley,!the!number!of!seasonal!worker! housing!units!needed!should!decline!in!relation!to!housing!for!year!round!residents.! With!growth!in!summer!jobs,!employees!will!be!able!to!switch!jobs!each!season!and!live! in!Winter!Park!year!round.! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!61! SECTION&7&–&TOWN&LAND&AND&HOUSING&RESOURCES& ! Town5Owned&Land& ! The!Town!owns!four!parcels,!comprising!over!10!acres,!on!which!attainable!housing! could!be!built.!Under!current!zoning,!these!parcels!could!accommodate!up!to!280! homes.!This!includes:! ! • The!Dimmit!Site,!on!which!the!first!phase!of!Hideaway!Junction!attainable!homes! was!built.!Only!ten!of!40!planned!homes!have!been!built.!Under!current!zoning,! however,!about!190!units!could!be!constructed.!A!grocery!store!is!planned!for! the!parcel!along!Hwy!40,!with!potential!for!some!rental!units!or!other!housing!to! be!accommodated!with!the!commercial!use;! ! • Fireside!Creek,!which!was!planned!to!have!24!townhomes!before!being! purchased!by!the!town.!Current!zoning!could!permit!up!to!40!units;! ! • Storage!lot,!which!could!develop!up!to!28!units;!and! ! • The!Creek!Parcel,!zoned!for!about!20!units.! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!62! Town5Owned&Land:&&2015& ! Source:!Town!of!Winter!Park!Planning!Dept.! & Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!63! Regulatory&Requirements&and&Funding& ! The!town!has!several!provisions!in!place!that!can!help!fund!attainable!housing!and! provide!incentives!to!developers!to!provide!units.!These!include:! ! • A!$3!per!square!foot!impact!fee!dedicated!to!an!Attainable!Housing!Fund!that! has!been!in!place!since!1999.!Revenue!was!near!$1.5!million!during!the!peak! development!year!in!2007!and!dropped!below!$2,000!in!2011!when! development!halted.!Revenues!last!year!were!about!$95,000.!! ! • The!town!also!has!a!1%!Real!Estate!Transfer!Tax!(RETT)!that!was!in!place!before! TABOR.!Revenues!have!peaked!over!$2!million!in!2007!and!returned!just!over! $650,000!last!year.!These!revenues!are!not!dedicated!for!housing!but!could!be! used!for!that!purpose.! ! Real&Estate&Transfer&Tax&and&Housing&Impact&Fee&Revenue& &Real&Estate& Transfer&Tax& Affordable& Housing&Fees&& 2014&$659,528!$95,830! 2013&$524,366!$33,689! 2012&$441,992!$97,934! 2011&$388,956!$1,878! 2010&$486,215!$98,075! 2009&$490,873!$464,349! 2008&$1,516,142!$567,959! 2007&$2,020,459!$1,474,954! 2006&$1,153,439!$471,342! 2005&$1,020,686!$178,785! Source:!!Town!of!Winter!Park!Planning!and!Building!Department! ! • An!additional!1%!RETT!assessment!on!the!Rendezvous!development!per!a! development!agreement.!This!will!be!a!permanent!RETT!on!all!home!sales!in!this! development!once!they!are!built.!A!portion!could!be!used!for!attainable!housing,! but!the!monies!are!not!specifically!targeted!for!such.! ! • A!development!agreement!for!the!Lakota!Development!which!will!require!six! attainable!homes!to!be!constructed!if!the!development!builds!to!maximum! density.! ! • Up!to!a!$10,000!credit!on!attainable!housing!fees!per!attainable!unit!if!a! developer!builds!an!attainable!home!for!residents!earning!low!to!moderate! incomes.!Current!Housing!Guidelines!specify!these!units!are!to!be!rented!to!an! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!64! employee!earning!80%!of!his/her!gross!salary!within!Grand!County!to!be! considered!attainable.!This!incentive!has!never!been!used.! ! • Accessory!dwelling!units!may!be!built!with!a!singleDfamily!home.!These!units! must!be!rented!to!an!employee!earning!80%!of!his/her!gross!salary!within!Grand! County.!A!handful!have!been!built,!but!the!local!rental!provision!is!not!well! enforced.! ! Organizations&& Two!organizations!exist!in!the!region!that!can!be!used!to!help!develop!and!manage! attainable!housing!in!Winter!Park.!The!Winter!Park!Affordable!Housing!Corporation! (WPAHC)!and!the!Grand!County!Housing!Authority!(GCHA).! ! Winter'Park'Affordable'Housing'Corporation'(WPAHC)' ! The!Town!created!the!WPAHC!in!2005.!Its!primary!purpose!is!to!ensure!that!an! adequate!supply!of!affordable!housing!is!available!within!the!Town.!This!Corporation!is! managed!by!a!3Dmember!board!appointed!by!the!Town!Council,!which!is!comprised!of! at!least!one!Town!Council!member.!It!has!no!paid!staff!members.!It!is!primarily!funded! by!the!Attainable!Housing!Fund.!! ! This!Corporation!was!created!by!the!Town!to!build!the!ability!to!run!their!own! attainable!housing!program.!It!is!a!separate!legal!entity!from!the!Town!and!can!take!on! partnerships!and!projects!with!the!for!profit!sector!that!the!Town!cannot.!The! Corporation!can!accept!conveyance!and!hold!title!to!land!from!the!Town!and!others!and! can!enter!into!contracts!for!the!design!and!construction!of!houses!and!residential! facilities.!! ! The!Corporation!constructed!the!first!phase!of!Hideaway!Junction!and!manages!these! attainable!housing!units.!The!Corporation!holds!title!to!the!over!ten!acres!of!land!that! can!be!used!for!attainable!housing!development!shown!in!the!above!map.!! Grand'County'Housing'Authority'(GCHA)' ! The!Grand!County!Housing!Authority!was!created!in!1977.!GCHA!acquires,!develops,! leases,!and!manages/operates!affordable!housing!for!Grand!County!residents!with! limited!incomes.!Funding!comes!primarily!from!the!federal!government!and!from!tenant! rents!and!local!funding!partners.!GCHA!also!works!in!partnership!with!city!and!state! governments!as!well!as!private!investors.!! ! The!Town!of!Winter!Park!no!longer!contributes!funds!to!this!organization.!Changeover! in!staffing!is!expected!to!occur!this!fall!with!the!retirement!of!the!current!director.! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!65! Managed!housing!includes:! ! • Two!senior!LIHTC!projects!–!one!in!Kremmling!and!another!in!Granby;! • An!assisted!living!center!in!Kremmling;!and! • Miller’s!Inn!attainable!homes!in!Winter!Park.!GCHA!manages!approval!of! applicants!for!purchase!of!these!units!and!oversees!property!reDsales!and! improvements.!! ! GCHA!also!built!Fox!Run!as!a!LIHTC!project!in!2002,!which!performed!well!until!the! recession.!Improper!drainage!on!site!contributed!to!a!mold!problem,!requiring!60%!of! tenants!to!be!relocated.!Investment!in!repairs!occurred!just!as!the!recession!hit,!rents! dropped!and!vacancies!rose.!Undergoing!foreclosure!in!2009,!the!property!was! purchased!as!a!market!rate!rental!complex!in!2013!and!was!75%!occupied!at!the!time!of! sale.! !! Additional!programs!include:! ! • Down!payment!assistance!program,!for!which!funding!needs!increased!with! rising!home!prices!and!larger!down!payments;! • Homebuyer!education!classes;!and! • Section!8!rental!assistance!vouchers.!GCHA!administers!Section!8!in!Grand! County,!Summit!County!and!Clear!Creek.!With!rising!rents!in!the!area,!choice! vouchers!are!taking!two!months!for!recipients!to!find!units!and!rents!are! exceeding!the!payment!standard.! ! ! Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!! APPENDIX&A&–&HOUSEHOLD&INCOME&AND&AFFORDABILITY& CALCULATIONS& & Housing!in!Winter!Park!is!affordable!when!the!monthly!payment!(rent!or!mortgage)!is! equal!to!no!more!than!30%!of!a!household’s!gross!income!(i.e.,!income!before!taxes).! Although!there!is!some!variation,!this!standard!for!affordability!is!commonly!applied!by! federal!and!state!housing!programs,!local!housing!initiatives,!mortgage!lenders!and! leasing!agents.! !!! Affordable!rents!and!purchase!prices,!meeting!this!30%!standard,!are!often!calculated! for!various!income!levels,!expressed!as!a!percentage!of!the!Area!Median!Income!(AMI).! AMI!is!published!annually!by!the!U.S.!Department!of!Housing!and!Urban!Development! (HUD)!for!each!county'and!represents!the!Median!Family!Income!of!an!area.!This!means! that!the!AMI!does!not!incorporate!incomes!from!nonDfamily!single!and!roommate! households,!which!make!up!56%!of!Winter!Park’s!households.!As!a!result,!the!AMI!will! generally!be!higher!than!the!average!income!of!all!households.!! ! The!AMI!varies!by!household!size.!The!median!(or!middle)!family!income!estimate!in!an! area!generally!falls!on!or!near!the!100%!AMI!rate!for!a!family!of!four.!In!Grand!County,! for!example,!the!AMI!in!2015!is!$78,000.! !! Grand&County&AMI’s&by&Household&Size:&&2015& AMI&Level&15person&25person&35person&45person&55person& 30%&$16,400!$18,750!$21,100!$24,250!$28,410! 50%&$27,300!$31,200!$35,100!$39,000!$42,150! 60%&$32,760!$37,440!$42,120!$46,800!$50,580! 80%&$43,700!$49,950!$56,200!$62,400!$67,400! 100%&$54,600!$62,400!$70,200!$78,000!$84,300! 120%&$65,520!$74,880!$84,240!$93,600!$101,160! 140%&$76,440!$87,360!$98,280!$109,200!$118,020! Source:!!US!Department!of!Housing!and!Urban!Development!(HUD)! ! Throughout!this!report,!the!analysis!of!affordability!will!be!based!on!the!income!for!a!2D person!household,!which!is!about!the!average!size!of!households!in!Winter!Park.!The! affordable!rents!and!purchase!prices!of!the!average!Winter!Park!household!at!various! rates!of!AMI!are!as!follows:! ! && Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!2! Maximum&Affordable&Housing&Costs& AMI&Household&Income&Max&Rent&Max&Purchase&Price*& 30%&$18,750!$470!$69,520! 50%&$31,200!$780!$115,680! 60%&$37,440!$940!$138,820! 80%&$49,950!$1,250!$185,210! 100%&$62,400!$1,560!$231,370! 120%&$74,880!$1,870!$277,640! 140%&$87,360!$2,180!$323,920! Source:!!HUD,!Consultant!team! *Assumes!30Dyear!mortgage!at!5.5%!with!5%!down!and!20%!of!the!payment!! covering!taxes,!HOA,!PMI!and!insurance.! ! Interest!rates!have!been!kept!low!for!several!years!and!will!eventually!rise.!Rates!for!a! 30Dyear!fixed!rate!mortgage!currently!average!around!4.5%!depending!upon!credit! scores.!As!rates!rise,!higher!incomes!will!be!required!of!buyers!to!buy!the!same!priced! home!today.!For!example,!a!one!percentage!point!increase!drops!the!affordable! purchase!price!by!$20,000!to!$25,000!for!households!with!incomes!at!80%!AMI.!This! should!be!a!consideration!when!setting!prices!for!new!homes!and!making!decisions! about!resale!price!calculations.! ! ! Winter'Park'Housing'Needs'Assessment,'September'2015' WSW'Consulting;'Rees'Consulting,'Inc.'' APPENDIX(B(–(NEXT(STEP(RECOMMENDATIONS( Before'acting'upon'the'specific'program'recommendations'made'in'this'report,'it'is' recommended'that'the'Town'first'undertake'a'strategic'planning'process'to'identify' housing'goals'and'establish'the'framework'needed'to'manage'attainable'units.''The' below'outlines'some'suggested'components'of'this'process.' A. Strategic'housing'plan/program' a. Establish'housing'goals' i. Is'housing'22%'of'the'workforce'satisfactory?' ii. Owners,'renters,'seasonal,'all?' b. Strategy'development' i. Implementation'strategy:''' 1. How'will'housing'be'provided/produced' 2. Prioritize'housing'needs/implementation'schedule' ii. Inventory'and'maximize'resources:''local'and'regional' iii. How'will'progress'be'monitored'(indicators,'regular'updates)' iv. Housing'management'plan' B. Housing'and'program'management' a. Staffing' b. Rental'management:''whom,'how' c. Ownership'management:''whom,'how' d. Deed'restrictions' e. Local'resources/funding' f. Learn'from'others:''site'visits,'documents,'management'structure,'etc.' C. Partnerships'and'collaboration' a. Regional'collaboration/resources' D. Housing'development'(see'the'recommendations'made'in'the'Conclusions' section'of'this'report'(see'pages'8'to'14)'for'more'detail)' a. Project'design'options:''conduct'site'visits'of'developed'projects' b. Financing'and'construction'options' i. Hideaway'Junction'Phase'II' ii. Apartments' iii. Employer'assisted'housing' iv. Downtown'housing' v. RFP'process'for'land' E. Housing'incentives/regulations' a. Inclusionary'zoning' b. Annexation'policies/agreements' c. Attainable'Housing'Guidelines' d. Impact'fee' Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!! APPENDIX&C&–&KEY&HOUSING&INDICATORS& ! As!housing!programs!are!implemented,!certain!indicators!can!be!assessed!to!evaluate! the!effectiveness!of!programs!and!monitor!changes.!In!Winter!Park,!some!key!indicators! to!monitor!include:! ! Local!Occupancy:!!! • Are!you!gaining!or!losing!ground?!!! ! Occupied&Housing&Units:&&2000&and&2010& &Source:!!2000!and!2010!US!Census! ! Home!Prices!and!Incomes:!!! • Are!homes!becoming!more!or!less!affordable?!!Sale!prices!rising!faster!than! incomes!means!homes!are!becoming!less!affordable.! ! Change&in&Home&Sale&Prices&and&Household&Incomes:&&2013&to&2014& &2013&2014&%&change& (20105&2014)& Average&Single&Family&Sale&Price&& (Winter&Park)& $572,160!$614,623!7%! Average&Single&Family&Sale&Price&per&Sq.&Ft.& (Winter&Park)& $209.08!$235.48!13%! Median&Household&Income&& (Grand&County)& $73,800!$76,000!3%! Source:!Land!Title,!HUD! !! 46.6% 40.3% 25.8% 18.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2010 % o f H o u s i n g U n i t s t h a t a r e O c c u p i e d Year Grand County Winter Park Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!2! Local!Homeownership:!!! • Is!the!percentage!of!homes!purchased!by!locals!increasing?!! ! 2014&Winter&Park&Home&Sales&by&Primary&Address&of&Buyer& !Source:!!Grand!County!Assessor!records! ! Percentage!of!Households!and!Jobs!in!Winter!Park:!!! • Is!Winter!Park’s!share!of!households!in!Grand!County!increasing!or!decreasing!in! relation!to!its!share!of!jobs?!!If!the!Town!is!housing!its!share!of!workers,!the!ratio! of!population!and!households!in!Grand!County!that!are!located!in!the!Town! should!approximate!the!ratio!of!jobs!in!the!Town.! ! Share&of&Grand&County’s&Population,&Households&and&Jobs& That&Are&Located&in&Winter&Park:&2015& !Source:!!DOLA,!QCEW!zip!code!files! Local buyer 5% Out of Area Buyer 95% 7% 7% 33% 0% 5% 10% 15% 20% 25% 30% 35% Population Households Jobs % o f P o p u l a t i o n , H o u s e h o l d s , o r J o b s i n Wi n t e r P a r k Winter!Park!Housing!Needs!Assessment,!September!2015! WSW!Consulting;!Rees!Consulting,!Inc.!!!3! Growth!in!the!Labor!Force:!!! • Is!labor!force!trailing!or!tracking!job!growth?!!Labor!force!growing!slower!than! jobs!leads!to!a!labor!shortage!and!may!be!a!symptom!of!a!lack!of!housing! options.! ! Change&in&Labor&Force&and&Jobs:&&Grand&County&–&2010&to&2014& &2010&2011&2012&2013&2014&%&change& (20105&2014)& Labor&force&8,950!8,793!8,750!8,810!8,934!D0.2%! Jobs&8,816!8,809!8,799!9,104!9,348!6.0%! Source:!Bureau!of!Labor!Statistics!(BLS)!LAUS,!Colorado!Dept.!of!Local!Affairs!(DOLA)! ! Rental!Vacancy!Rates:!!! • Are!vacancy!rates!too!low?!!Vacancy!rates!below!5%!are!generally!too!low!–! demand!is!exceeding!supply!and!rents!will!likely!rise.! • Are!units!able!to!be!filled!in!the!summer!as!well!as!winter?!!Rising!summer! occupancies!indicate!a!more!even!summer!to!winter!employment!base!and/or! more!year!round!residents!are!occupying!units.! ! Vacancy&Rates:&&Summer&and&Winter& &Fox&Run&Apartments&Non5Apartment&Rentals& &Summer! 2014! Winter! 2014/15! Summer! 2015! Summer! 2014! Winter! 2014/15! Summer! 2015! Vacant&Units&20!0!8!21!0!9! Total&Units&64!64!64!70!70!70! Vacancy&Rate&31%!0%!13%!30%!0%!13%! Source:!Property!manager!interviews;!http://www.resortsofgrandcounty.com! ! Market!rents:!!! • Are!market!rents!rising!or!falling?!!! ! Average&Rents:&&Winter&Park,&2015& &Non5Apartments& (Winter&Park)& Fox&Run& (Fraser)& 15bedroom&$841!(60%!AMI)!$975! 25bedroom&$1,175!(80%!AMI)!$1,350! 35bedroom&$1,860!(110%!AMI)!VRBO! Average&rent&per&square&foot&&$1.74*!$1.63! Source:!!Property!manager!interviews;!Craigslist!(Aug.!17,!2015);!www.resortsofgrandcounty.com! *Includes!vacant!(forDrent)!rentals!only! ! & Ehlers Proposal to the Town of Fraser, Colorado October 29, 2015 Page 1 October 28, 2015 Mr. Jeff Durbin, Manager Town of Fraser 153 Fraser Avenue Fraser CO 80442-0370 Re: Ehlers Proposal to Provide Economic Development Services to the Town of Fraser Dear Mr. Durbin: On behalf of Ehlers, we are pleased to present this proposal to provide economic development services to the Town of Fraser. We understand that the Town wishes to build on its recent economic development planning work with the Town of Winter Park and the Winter Park-Fraser Valley Chamber of Commerce, and to advance several Fraser-specific priorities pursuant to the economic development resolution recently approved by the Town Board of Trustees. Ehlers has the staff expertise and capacity to assist the Town with many different aspects of the strategy contemplated by the Town’s economic development resolution. We believe, however, that we can provide the most value to Fraser in three specific and interrelated consulting areas. Cost of Business Analysis First, Ehlers proposes to assist the Town in researching and evaluating all major taxes and fees applicable to business development and operations in Fraser, both those imposed and collected by the Town as well as those attributable to other jurisdictions. We envision looking at a range of representative business and development types, perhaps 3 to 4 of each, and to collect and aggregate the taxes and fees (including utility fees) applicable to each business / development example. We would then compare the 6 – 8 scenarios for any internal discrepancies – that is, does any type of business or project pay significantly more than another due to an existing tax or fee structure? – and also compare Fraser’s tax / fee levels to data collected from other communities. This analysis would conclude with recommendations for reevaluating Town fee and tax structures, and potentially related areas of the Town’s revenue and expense profile, to the extent that problem areas are identified. Economic Development Strategy and Action Plan Second, working from the foundation laid by the Town’s planning collaboration with Winter Park and the Chamber on advancing core issues such as transit, broadband infrastructure, and attainable housing, as well as the Town priorities identified in its recent economic development resolution, Ehlers proposes to facilitate a Town economic development strategy and action plan for a 2-3 year timeframe, tailored to Fraser’s commercial / residential development and business retention needs as well as the Town’s fiscal, staffing, and political capacities. Based on our previous conversations with the Town and our experience with similar economic development strategy engagements, we have prepared the following scope of work to achieve the desired outcome of an economic development action plan that is focused on Fraser, its opportunities and challenges, and specific steps the Town realistically can take in 2016-2018 to promote its future economic vitality. Ehlers Proposal to the Town of Fraser, Colorado October 29, 2015 Page 2 1. Background Research: Date TBD a. Fraser Valley Strategic Economic Development Plan, other regional plans; b. Town’s Comprehensive Plan, Capital Improvement Plan, 10-Year Financial Forecast, and any other related plans and policies. 2. Town Board appoints Advisory Group: Date TBD 3. First Advisory Group Meeting: Date TBD a. Project Overview and Initial Discussion of Potential Outcomes 4. Conduct Fraser-Focused Development Assessment: Date TBD a. Identify target areas for commercial development: greenfield and redevelopment. b. Identify advantages, challenges, and opportunities for each target area. c. Interview land use, development, and market experts regarding target areas, possible/probable commercial uses, and estimated development time horizons. d. Develop potential strategy options compatible with information from above steps. e. Advisory Group discussion of market assessment and strategy options. 5. Develop Draft Economic Development Strategy and Action Plan: Date TBD a. Identify informing plans and policies, related work b. Fraser target areas and uses, with time horizons c. Prioritized near and long-term strategies d. Action plan i. Revisions to plans and policies, as necessary ii. CIP core infrastructure feasibility studies iii. Networking / marketing efforts, including website information iv. Annual state of development review v. Other actions to be defined by strategies e. Review Draft Strategy and Action Plan with Advisory Group 6. Revise and Present Final Report for Advisory Group Approval: Date TBD 7. Present Final Report for Town Board Approval: Date TBD If selected for this project, Ehlers will be available to begin background research and interviews within one week of notification by the Town, and we will make every effort to achieve the Town’s goal of strategy and action plan completion by [Date TBD]. Advisory Group: Ehlers recommends that the Town appoint an advisory group of individuals with a strong interest in Fraser’s economic future, and with experience and expertise that will benefit the group and the strategy-setting process. The advisory group will not be expected to engage directly in the research, market assessment and strategy drafting activities outlined above, but will be asked to provide the guidance, ideas, opinions, and local context that ensure the final product is reflective of the Town and what it can do to promote its future development. For this project, we believe the advisory group should be comprised of approximately six to eight members, with the following potential representation: Ehlers Proposal to the Town of Fraser, Colorado October 29, 2015 Page 3 2 Town Trustees 1 Planning Commission Member 2 Business Community Representatives 1 Commercial Developer / Real Estate Broker active in the City 1 Residential Developer / Realtor active in the City 1 City Staff Member (ex officio) As indicated in the scope of work and timeline above, Ehlers anticipates four meetings with the advisory group, beginning in [Date TBD] and concluding in [Date TBD]. Each meeting will likely occur near the beginning or end of a workday, and will last no more than 90 minutes. To allow for a prompt start to the strategy-setting process, we recommend that the Town appoint the advisory group at its [Date TBD] meeting. Economic Development Participation / Incentive Policies Third, Ehlers strongly believes in the best practice of municipalities establishing economic development participation / incentive policies that reflect their own development priorities, and implementing clear development incentive application forms and processes, so that potential business partners understand the Town’s expectations and timelines upfront. To this end, Ehlers proposes to help the Town draft an economic development policy and application that explains the Town’s development objectives and philosophy, the types of assistance it is willing to consider, and how it expects to engage with developers and other private parties. Fee Proposal At Ehlers, we want our clients to feel that they receive more in value from our work than we receive in compensation, and we are always striving to find ways to keep overall advisory expenses down. For these economic development and utility rate engagements, because we do not yet know the full scope or intensity of our involvement with the Town, we cannot provide a precise fee estimate, and therefore propose to at least begin our work on an hourly fee basis. That said, we would estimate total advisory fees as follows for the work described above: Business / development cost analysis: $5,000 – 7,500 Economic development strategy and action plan: $15,000 - $22,500 Economic development policy and application process: $2,500 - $5,000 Our standard hourly fee schedule is as follows: Senior Financial Advisor $230 / hour Financial Advisor $210 / hour Clerical Support $100 / hour Bruce Kimmel will invoice and document his time at Ehlers’ senior financial advisor rate, while Paul Wisor will bill at the financial advisor rate. Consulting time is billed in 15-minute increments and hourly rates typically increase no more than $5 per year. We do not charge clients for mileage, meals, or other incidental business expenses except for messenger and overnight services. Bruce Kimmel may charge the Town for a portion of his airfare and other documented Ehlers Proposal to the Town of Fraser, Colorado October 29, 2015 Page 4 travel expenses, depending on cost proration with other clients in the region (i.e. due to work / meetings on the same trip) and subject to the Town’s express consent. Ehlers Team Background and Experience Finally, we have extensive information that we would be happy to share with the Town on the advisors that we propose for Ehlers’ Fraser team, as well as relevant project experience, client references, and our overall economic development and utility rate advisory service offerings. Rather than present that background information here, please let us know what material would be useful in your consideration of this proposal and we will provide it to you promptly. Thank you for the opportunity to present this proposal to the Town of Fraser. We would be honored to advise the Town and look forward to continuing our conversation with you. Respectfully submitted, Bruce Kimmel Senior Financial Advisor/Vice President Paul Wisor Financial Advisor TOWN OF FRASER RESOLUTION NO. 2015-11-01 A RESOLUTION AUTHORIZING THE TOWN MANAGER TO EXECUTE A CONTRACT FOR ECONOMIC DEVELOPMENT CONSULTING SERVICES WITH EHLERS-INC. BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FRASER, COLORADO THAT: 1. That the Town Manager is hereby authorized to execute contract for economic development consulting services with Ehlers-Inc. with a term to expire December 31, 2016. READ, PASSED ON ROLL CALL VOTE, AND ADOPTED BY THE BOARD OF TRUSTEES THIS 4th DAY OF NOVEMBER, 2015. Votes in favor: ___ BOARD OF TRUSTEES OF THE Votes opposed: ___ TOWN OF FRASER, COLORADO Absent: ___ Abstained: ___ BY: Mayor ATTEST: (S E A L) Town Clerk GRAND ENTERPRISE INITIATIVE Grand Enterprise Initiative c/o Kapoks 855 Timber Lane Boulder,CO 80304 Sept.22,2015 Mayor Peggy Smith and Board of Trustees Town of Fraser P.O. Box 370 Fraser, CO 80442 Dear Mayor Smith and Board Members: Thank you considering support for the Grand Enterprise Initiative in 2016.Your support will help us provide free and confidential business coaching and networking support to community members wanting to start or expand businesses in Fraser and Grand County.The Grand Enterprise Initiative will continue to support the development of stronger communities in Grand County in 2016 by nurturing entrepreneurs one business at a time. The Grand Enterprise Initiative has worked with 16 clients in Fraser since going countywide in 2012. We have helped retain jobs in the Fraser area by working with one business acquisition,one expansion,one new business project,minor business tune-ups and working with clients on issues relating to business sustainability and business concepts.One of our clients moved a Granby business to Fraser last year and that business continues to operate in Fraser.Our free and confidential business coach,Patrick Brower,has had a total of 70 client visits with Fraser-based entrepreneurs.Please see the attached Grand Enterprise Initiative Program Statistics for further detail on our activity in Fraser and the rest of the county. We would like the town of Fraser to consider collaboratively funding the Grand Enterprise Initiative in 2016 for the amount of$10,000.The Grand Enterprise Initiative's other funders include the Town of Granby,Grand County,the Town of Winter Park,the Grand Foundation and the Freeport-McMoran Copper and Gold Foundation.We are also pursuing funding from each of the towns in Grand County for 2016.The Grand Enterprise Initiative is cost-effective,utilizing only one full time paid contractor and a large,active volunteer base. The Grand Enterprise Initiative is a division of Kapoks,a Colorado based 501 (c)(3)with a mission to inspire and empower communities to reach their full potential through economic development and promotion of the entrepreneurial spirit. Thank you again for considering this request. We intend to schedule time at one of your upcoming board or committee meetings to discuss our program and our request. Sincer 1 I L iyri er Pierro Chair,Manageme t Team Grand Enterprise Initiative Grand Enterprise Initiative In Fraser Total Clients New Businesses Jobs Created 16 2 4 16 clients represents 8% of the total number of clients for the county wide initiative. For the life of the project in Fraser, Enterprise Facilitator Patrick Brower and his Grand Enterprise Initiative Resource Team have also worked with: 2 business expansions 8 minor tune-ups 3 pending new businesses These tune-ups and expansions have helped to retain 14 jobs. Dollars and Cents Clients working with the Grand Enterprise Initiative have contributed the following to the local economy: New Capital New Sales 30,000 225,000 Grand Enterprise Initiative, P.O. Box 1135, Granby, Colorado 80446 Enterprise Facilitator, Patrick Brower, 970-531-0632 patrickbrower@kapoks.org Grandei.org Grand Enterprise Initiative Building Strong Communities In Grand County, One Entrepreneur At A Time! The Grand Enterprise Initiative offers FREE and CONFIDENTIAL business management coaching to anyone wanting to start or expand a business in Grand County. It is a community-based non-profit. In its fourth year, the Initiative has had an impact on Grand County's economy: Total Clients New Businesses Jobs Created 203 24 79 For the life of the project, Enterprise Facilitator Patrick Brower and his Grand Enterprise Initiative Resource Team have also worked with: 30 business expansions 13 diversifications 3 acquisitions (several pending) 32 minor tune-ups Grand Enterprise Initiative, P.O. Box 1135, Granby, Colorado 80446 Enterprise Facilitator, Patrick Brower, 970-531-0632 patrickbrower@kapoks.org Grandei.org GRAND ENTERPRISE INITIATIVE Grand Enterprise Initiative Profit & Loss Budget Overview January through December 2016 110GrandEl 100Programs)Total 100Programs 990RestrictedFunds TOTAL Jan-Dec 16 Jan -Dec 16 Jan-Dec 16 Jan-Dec 16 Ordinary Income/Expense Income 42000 • ContributionsNonGovGrants 42300 • Foundation&trust grants 22,500 22,500 Total 42000 • ContributionsNonGovGrants 22,500 22,500 43000 • ContributionsGovGrants 43300• Local government grants 64,000 64,000 Total 43000 • ContributionsGovGrants 64,000 64,000 Total Income 86,500 86,500 Gross Profit 86,500 86,500 Expense 70000 • ExpensesPersonnelRelated 71000 • Grant&contract expense 71200 • Contracts-program-related 64,890 64,890 64,890 Total 71000 •Grant&contract expense 64,890 64,890 64,890 75000 Contract Services 75200 •Accounting Fees 680 680 680 Total 75000 •Contract Services 680 680 680 Total 70000 • ExpensesPersonnelRelated 65,570 65,570 65,570 80000 • ExpensesNonpersonnelRelated 81000 • NonpersonnelExpenses 81100•Supplies 95 95 95 81300 •Telephone&telecomm 480 480 480 81400 • Postage,shipping,delivery 1,535 1,535 1,535 81700 • Printing©ing 1,580 1,580 1,580 Total 81000 • NonpersonnelExpenses 3,690 3,690 3,690 82000 • Facility&equipment expenses 82900• Donated facilities 860 860 860 Total 82000 • Facility&equipment expenses 860 860 860 83000•Travel&meetings expenses 83200• ConferencesConventionsMeetings 500 500 500 83300 • Client Meeting Expense 400 400 400 83400 •Automobile Mileage Expense 4,800 4,800 4,800 110GrandEl 100Programs)Total 100Programs 990RestrictedFunds TOTAL Jan-Dec 16 Jan -Dec 16 Jan-Dec 16 Jan-Dec 16 Total 83000 •Travel&meetings expenses 5,700 5,700 5,700 85000 • Other expenses 85400 • Staff development 1,200 1,200 1,200 85700 • Advertising 3,500 3,500 3,500 Total 85000 •Other expenses 4,700 4,700 4,700 Total 80000 • ExpensesNonpersonnelRelated 14,950 14,950 14,950 Total Expense 80,520 80,520 80,520 Net Ordinary Income 80,520 80,520 86,500 5,980 Other Income/Expense Other Expense 90000 • NonGAAPExpenses 99200 • Additions to reserves 1,680 1,680 1,680 99300 • Program admin(5%of direct) 4,200 4,200 4,200 Total 90000 • NonGAAPExpenses 5,880 5,880 5,880 Total Other Expense 5,880 5,880 5,880 Net Other Income 5,880 5,880 0 5,880 Net Income 86,400 86,400 86,500 100 Page 2 TOWN OF FRASER - JOINT FACILITIES BALANCE SHEET SEPTEMBER 30, 2015 JOINT FACILITIES FUND ASSETS 40-10210 JFOC CHECKING-GMB 0318047507 101,178.17 40-10215 GMB MONEY MARKET-O&M RESERVE 31,039.15 40-11550 A/R - WPR 19,102.10 40-11560 A/R - GC#1 30,074.24 40-11570 A/R - TOF 16,920.88 TOTAL ASSETS 198,314.54 LIABILITIES AND EQUITY LIABILITIES 40-20920 JFOC O&M RESERVE 196,631.34 TOTAL LIABILITIES 196,631.34 FUND EQUITY UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD 1,683.20 BALANCE - CURRENT DATE 1,683.20 TOTAL FUND EQUITY 1,683.20 TOTAL LIABILITIES AND EQUITY 198,314.54 TOWN OF FRASER - JOINT FACILITIES REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 JOINT FACILITIES FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT REVENUE 40-30-100 INTEREST - O&M ACCOUNTS 18.52 224.88 300.00 75.12 75.0 40-30-200 O&M REIMBURSEMENT - WPR 19,102.10 128,862.22 242,567.00 113,704.78 53.1 40-30-210 O&M REIMBURSEMENT - GC#1 30,074.24 203,003.78 386,932.00 183,928.22 52.5 40-30-220 O&M REIMBURSEMENT - TOF 16,920.88 113,017.27 209,833.00 96,815.73 53.9 40-30-900 MISCELLANEOUS REVENUE .00 1,458.32 .00 ( 1,458.32).0 40-30-999 CARRYOVER BALANCE .00 .00 196,089.00 196,089.00 .0 TOTAL REVENUE 66,115.74 446,566.47 1,035,721.00 589,154.53 43.1 TOTAL FUND REVENUE 66,115.74 446,566.47 1,035,721.00 589,154.53 43.1 TOWN OF FRASER - JOINT FACILITIES EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 JOINT FACILITIES FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT PLANT EXPENDITURES 40-85-110 SALARIES 12,918.85 130,131.70 207,713.00 77,581.30 62.7 40-85-210 HEALTH INSURANCE 1,920.60 25,037.67 56,448.00 31,410.33 44.4 40-85-220 FICA TAX 964.54 9,380.37 15,890.00 6,509.63 59.0 40-85-230 RETIREMENT 395.15 4,919.90 8,309.00 3,389.10 59.2 40-85-250 UNEMPLOYMENT TAX 38.88 391.41 623.00 231.59 62.8 40-85-280 TRAINING PROGRAMS .00 240.00 3,000.00 2,760.00 8.0 40-85-290 TRAVEL - MEALS AND LODGING .00 95.45 3,500.00 3,404.55 2.7 40-85-295 MEALS - LOCAL BUSINESS 45.35 45.35 500.00 454.65 9.1 40-85-310 LEGAL FEES .00 .00 5,000.00 5,000.00 .0 40-85-320 AUDIT FEE .00 4,074.00 4,750.00 676.00 85.8 40-85-330 ENGINEERING FEES .00 .00 15,000.00 15,000.00 .0 40-85-350 SLUDGE REMOVAL 3,737.63 24,084.38 65,000.00 40,915.62 37.1 40-85-370 PROFESSIONAL SERVICES 267.96 2,411.64 10,000.00 7,588.36 24.1 40-85-375 REIMBURSABLE PROF SERVICES .00 .00 1,000.00 1,000.00 .0 40-85-410 BANK CHARGES .00 .00 100.00 100.00 .0 40-85-430 INSURANCE - PLANT 25,141.54 25,141.54 32,000.00 6,858.46 78.6 40-85-440 ADVERTISING .00 1,074.55 500.00 ( 574.55)214.9 40-85-460 PLANT MAINTENANCE AND REPAIR 40.00 26,317.18 50,000.00 23,682.82 52.6 40-85-475 GROUNDS MAINTENANCE .00 1,005.68 2,500.00 1,494.32 40.2 40-85-480 EQUIPMENT RENTAL .00 .00 500.00 500.00 .0 40-85-490 PROFESSIONAL MEMBERSHIPS .00 .00 500.00 500.00 .0 40-85-500 OPERATING SUPPLIES 370.99 2,337.89 20,000.00 17,662.11 11.7 40-85-506 OPERATING SUPPLIES - CHEMICALS 3,057.28 21,462.88 75,000.00 53,537.12 28.6 40-85-510 EQUIPMENT PURCHASE AND REPAIR .00 4,445.05 20,000.00 15,554.95 22.2 40-85-520 TESTING 2,552.36 25,475.42 65,000.00 39,524.58 39.2 40-85-525 PERMITS .00 .00 10,000.00 10,000.00 .0 40-85-550 POSTAGE .00 215.68 .00 ( 215.68).0 40-85-560 UTILITIES - TELEPHONE 279.42 2,438.72 3,500.00 1,061.28 69.7 40-85-562 UTILITIES - ELECTRICITY 13,654.89 125,034.32 145,000.00 19,965.68 86.2 40-85-565 UTILITIES - NATURAL GAS 87.07 1,954.84 6,500.00 4,545.16 30.1 40-85-567 UTILITIES - PLANT GENERATOR .00 .00 500.00 500.00 .0 40-85-569 UTILITIES - TRASH REMOVAL 168.48 1,516.32 2,500.00 983.68 60.7 40-85-650 VEHICLE EXPENSES 456.23 5,501.33 7,500.00 1,998.67 73.4 40-85-690 MISCELLANEOUS EXPENSE .00 150.00 1,000.00 850.00 15.0 TOTAL PLANT EXPENDITURES 66,097.22 444,883.27 839,333.00 394,449.73 53.0 TOTAL FUND EXPENDITURES 66,097.22 444,883.27 839,333.00 394,449.73 53.0 NET REVENUE OVER EXPENDITURES 18.52 1,683.20 196,388.00 194,704.80 .9 TOWN OF FRASER - JOINT FACILITIES BALANCE SHEET SEPTEMBER 30, 2015 JFF - CRR/CIP FUND ASSETS 47-10220 COLOTRUST 8006 - CRR 31,938.40 47-10310 CB MONEY MARKET - CRR 231,702.80 47-10410 GMB MONEY MARKET - CRR 40,020.97 47-10521 CDARS - 1014540756 - CRR 386,408.95 47-10522 CDARS - 1014540802 - CRR 386,409.02 47-10523 CDARS - 1014540837 - CRR 386,357.20 47-10526 CDARS - 1015300872 - CRR 386,002.35 47-10527 CDARS - 1017868876 - CRR 300,327.65 TOTAL ASSETS 2,149,167.34 LIABILITIES AND EQUITY LIABILITIES 47-20910 JFOC - CRR FUNDS 2,233,428.19 TOTAL LIABILITIES 2,233,428.19 FUND EQUITY UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD ( 84,260.85) BALANCE - CURRENT DATE ( 84,260.85) TOTAL FUND EQUITY ( 84,260.85) TOTAL LIABILITIES AND EQUITY 2,149,167.34 TOWN OF FRASER - JOINT FACILITIES REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 JFF - CRR/CIP FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT CRR AND CIP FUND REVENUES 47-30-100 INTEREST INCOME - CRR ACCOUNTS 1,039.03 9,489.57 12,000.00 2,510.43 79.1 47-30-800 SALE OF JFOC FIXED ASSETS .00 14,215.69 .00 ( 14,215.69).0 47-30-990 CRR CARRYOVER BALANCE .00 .00 1,879,684.00 1,879,684.00 .0 TOTAL CRR AND CIP FUND REVENUES 1,039.03 23,705.26 1,891,684.00 1,867,978.74 1.3 TOTAL FUND REVENUE 1,039.03 23,705.26 1,891,684.00 1,867,978.74 1.3 TOWN OF FRASER - JOINT FACILITIES EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 JFF - CRR/CIP FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT CAPITAL RPLMNTRESERVE PROJECTS 47-60-370 ENG, LEGAL & OTHER PROF SRVCS 5,291.10 65,916.11 .00 ( 65,916.11).0 47-60-730 CRR PROJECTS .00 .00 25,700.00 25,700.00 .0 TOTAL CAPITAL RPLMNTRESERVE PROJEC 5,291.10 65,916.11 25,700.00 ( 40,216.11)256.5 CAPITAL IMPROVEMENT PROJECTS 47-65-730 CIP PROJECTS .00 42,050.00 145,000.00 102,950.00 29.0 TOTAL CAPITAL IMPROVEMENT PROJECTS .00 42,050.00 145,000.00 102,950.00 29.0 TOTAL FUND EXPENDITURES 5,291.10 107,966.11 170,700.00 62,733.89 63.3 NET REVENUE OVER EXPENDITURES ( 4,252.07)( 84,260.85)1,720,984.00 1,805,244.85 ( 4.9) TOWN OF FRASER COMBINED CASH INVESTMENT SEPTEMBER 30, 2015 FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 09:59PM PAGE: 1 COMBINED CASH ACCOUNTS 01-10200 GENERAL CHECKING #878-000884 890,938.75 01-10220 GENERAL CO-01-0160-8001 8,787,305.97 TOTAL COMBINED CASH 9,678,244.72 01-10100 CASH ALLOCATED TO OTHER FUNDS ( 9,678,244.72) TOTAL UNALLOCATED CASH .00 CASH ALLOCATION RECONCILIATION 10 ALLOCATION TO GENERAL FUND 3,291,787.42 20 ALLOCATION TO CONSERVATION TRUST FUND 19,407.01 30 ALLOCATION TO CAPITAL EQUIP REPLACEMENT FUND 453,342.97 32 ALLOCATION TO CAPITAL ASSET FUND 585,400.26 40 ALLOCATION TO DEBT SERVICE FUND 641,441.72 50 ALLOCATION TO WATER FUND 1,461,430.28 55 ALLOCATION TO WASTEWATER FUND 3,225,435.06 TOTAL ALLOCATIONS TO OTHER FUNDS 9,678,244.72 ALLOCATION FROM COMBINED CASH FUND - 01-10100 ( 9,678,244.72) ZERO PROOF IF ALLOCATIONS BALANCE .00 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 GENERAL FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 09:59PM PAGE: 2 ASSETS 10-10100 CASH - COMBINED FUND 3,291,787.42 10-10290 CASH WITH TREASURER 615.82 10-11100 PROPERTY TAXES RECEIVABLE 197,206.00 10-11550 ACCTS REC - BILLINGS 56,730.68 TOTAL ASSETS 3,546,339.92 LIABILITIES AND EQUITY LIABILITIES 10-20210 ACCRUED A/P - AUDIT 3,600.00 10-21000 ACCRUED WAGES 31,596.64 10-21710 FWT/FICA PAYABLE 11,175.91 10-21730 STATE WITHHOLDING PAYABLE 4,447.00 10-21740 UNEMPLOYMENT TAXES PAYABLE 139.93 10-21750 RETIREMENT PLAN PAYABLE 2,952.42 10-21755 457 DEFERRED COMP PAYABLE 1,735.60 10-21760 HEALTH INSURANCE PAYABLE 17,227.04 10-21773 DEPENDENT CARE PAYABLE 610.01 10-21775 FLEX HEALTH PLAN PAYABLE 3,331.37 10-22210 DEFERRED TAXES 197,206.35 10-22920 SUBDIVISION IMP SECURITY DEP 244,742.25 10-22930 DRIVEWAY PERMIT SURETY 20,625.00 10-22950 RENTAL PROPERTY DEPOSITS HELD 200.00 TOTAL LIABILITIES 539,589.52 FUND EQUITY 10-27000 COMMITTED FUND BALANCE 750,000.00 10-27100 TOTAL RESTRICTED FUND BALANCE 251,805.00 UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD 2,004,945.40 BALANCE - CURRENT DATE 2,004,945.40 TOTAL FUND EQUITY 3,006,750.40 TOTAL LIABILITIES AND EQUITY 3,546,339.92 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 GENERAL FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 09:59PM PAGE: 3 TAXES 10-31-100 GENERAL FUND PROPERTY TAX 5,952.70 196,784.58 197,265.00 480.42 99.8 10-31-200 SPECIFIC OWNERSHIP TAX 1,824.87 9,071.43 10,000.00 928.57 90.7 10-31-300 MOTOR VEHICLE TAX .00 2,608.50 4,200.00 1,591.50 62.1 10-31-400 TOWN SALES TAX 155,238.28 1,017,607.56 1,595,000.00 577,392.44 63.8 10-31-410 USE TAX - BUILDING MATERIALS 35,958.13 230,559.97 65,000.00 ( 165,559.97)354.7 10-31-420 USE TAX - MOTOR VEHICLE SALES 8,607.13 48,587.59 55,000.00 6,412.41 88.3 10-31-430 STATE CIGARETTE TAX 341.60 2,273.86 4,000.00 1,726.14 56.9 10-31-800 FRANCHISE FEES 853.27 30,699.02 50,000.00 19,300.98 61.4 TOTAL TAXES 208,775.98 1,538,192.51 1,980,465.00 442,272.49 77.7 LICENSES & PERMITS 10-32-100 BUSINESS LICENSE FEES 80.00 12,500.00 12,750.00 250.00 98.0 10-32-110 REGULATED INDUSTRY FEES/TAXES 8,581.57 72,257.09 25,000.00 ( 47,257.09)289.0 TOTAL LICENSES & PERMITS 8,661.57 84,757.09 37,750.00 ( 47,007.09)224.5 INTERGOVERNMENTAL 10-33-100 GRANTS .00 10,000.00 166,000.00 156,000.00 6.0 TOTAL INTERGOVERNMENTAL .00 10,000.00 166,000.00 156,000.00 6.0 CHARGES FOR SERVICES 10-34-100 ANNEXATION FEES .00 275.00 1,000.00 725.00 27.5 10-34-110 ZONING FEES .00 8,925.00 1,500.00 ( 7,425.00)595.0 10-34-120 SUBDIVISION FEES 650.00 29,550.00 1,500.00 ( 28,050.00)1970.0 10-34-130 MISCELLANEOUS PLANNING FEES 50.00 1,960.00 1,000.00 ( 960.00)196.0 TOTAL CHARGES FOR SERVICES 700.00 40,710.00 5,000.00 ( 35,710.00)814.2 MISCELLANEOUS REVENUE 10-36-100 INTEREST EARNINGS 469.08 3,303.14 3,250.00 ( 53.14)101.6 10-36-300 RENTAL INCOME 1,365.00 12,540.00 9,500.00 ( 3,040.00)132.0 10-36-610 REIMBURSABLE - PROF SERVICES 6,631.40 82,833.22 100,000.00 17,166.78 82.8 10-36-900 MISCELLANEOUS REVENUE 6,272.53 31,596.45 30,000.00 ( 1,596.45)105.3 TOTAL MISCELLANEOUS REVENUE 14,738.01 130,272.81 142,750.00 12,477.19 91.3 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 GENERAL FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 09:59PM PAGE: 4 OTHER SOURCES & TRANSFERS 10-39-900 TRANSFERS IN FROM OTHER FUNDS .00 .00 10,000.00 10,000.00 .0 10-39-999 UNASSIGNED FUND BALANCE .00 2,116,144.50 2,003,613.00 ( 112,531.50)105.6 TOTAL OTHER SOURCES & TRANSFERS .00 2,116,144.50 2,013,613.00 ( 102,531.50)105.1 TOTAL FUND REVENUE 232,875.56 3,920,076.91 4,345,578.00 425,501.09 90.2 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 GENERAL FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 09:59PM PAGE: 5 TOWN BOARD 10-41-110 SALARIES 5,715.00 15,360.00 26,000.00 10,640.00 59.1 10-41-220 FICA TAX 437.20 1,175.05 1,989.00 813.95 59.1 10-41-280 TRAINING PROGRAMS 85.00 3,152.17 6,000.00 2,847.83 52.5 10-41-290 TRAVEL, MEALS AND LODGING .00 1,648.30 5,000.00 3,351.70 33.0 10-41-295 MEALS AND ENTERTAINMENT 190.86 3,563.45 8,000.00 4,436.55 44.5 10-41-690 MISCELLANEOUS EXPENSE .00 ( 14,379.45)8,000.00 22,379.45 (179.7) 10-41-860 GRANTS AND AID TO AGENCIES .00 4,155.00 .00 ( 4,155.00).0 10-41-861 INTERGOVERNMENTAL AGREEMENTS .00 4,500.00 9,000.00 4,500.00 50.0 10-41-862 FRASER/WINTER PARK POLICE DEPT 33,835.00 304,515.00 432,000.00 127,485.00 70.5 10-41-863 STREET LIGHTING AND SIGNALS 1,165.74 13,042.80 15,250.00 2,207.20 85.5 10-41-864 SPECIAL EVENTS .00 12,500.00 10,000.00 ( 2,500.00)125.0 10-41-867 CHAMBER OF COMMERCE - IGA .00 28,716.90 68,114.00 39,397.10 42.2 10-41-868 WINTER SHUTTLE - IGA .00 56,000.00 80,000.00 24,000.00 70.0 10-41-870 BUSINESS DIST STREETSCAPE .00 3,200.00 100,000.00 96,800.00 3.2 10-41-871 BUSINESS ENHANCEMENT PROGRAMS 896.42 32,312.42 105,000.00 72,687.58 30.8 TOTAL TOWN BOARD 42,325.22 469,461.64 874,353.00 404,891.36 53.7 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 GENERAL FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 09:59PM PAGE: 6 ADMINISTRATION 10-45-110 SALARIES 17,127.89 186,181.41 250,000.00 63,818.59 74.5 10-45-210 HEALTH INSURANCE 3,550.56 35,069.80 35,000.00 ( 69.80)100.2 10-45-220 FICA TAX 1,079.34 12,013.24 19,125.00 7,111.76 62.8 10-45-230 RETIREMENT 598.08 6,331.09 10,000.00 3,668.91 63.3 10-45-250 UNEMPLOYMENT TAX 51.86 563.25 750.00 186.75 75.1 10-45-280 TRAINING PROGRAMS 25.00 3,308.00 4,000.00 692.00 82.7 10-45-290 TRAVEL, MEALS AND LODGING 146.11 6,124.73 5,000.00 ( 1,124.73)122.5 10-45-295 MEALS AND ENTERTAINMENT 141.76 482.49 3,500.00 3,017.51 13.8 10-45-310 LEGAL FEES 5,507.28 34,213.09 65,000.00 30,786.91 52.6 10-45-320 AUDIT FEES .00 12,221.00 22,672.00 10,451.00 53.9 10-45-330 ENGINEERING FEES 98.00 3,518.65 10,000.00 6,481.35 35.2 10-45-360 COMPUTERS-NETWORKS AND SUPPORT 1,990.77 27,711.78 65,000.00 37,288.22 42.6 10-45-370 OTHER PROFESSIONAL SERVICES .00 18,883.84 90,000.00 71,116.16 21.0 10-45-375 REIMBURSABLE PROF SERVICES 5,812.32 76,895.75 100,000.00 23,104.25 76.9 10-45-380 JANITORIAL SERVICES 986.66 5,620.60 15,300.00 9,679.40 36.7 10-45-385 TREASURER'S FEES 119.05 3,935.65 5,918.00 1,982.35 66.5 10-45-395 RECORDING FEES 500.00 500.00 1,000.00 500.00 50.0 10-45-410 BANK CHARGES 48.00 484.48 1,000.00 515.52 48.5 10-45-420 ELECTIONS .00 .00 5,000.00 5,000.00 .0 10-45-430 INSURANCE - ALL DEPARTMENTS .00 17,545.04 42,000.00 24,454.96 41.8 10-45-440 ADVERTISING 8.43 57.32 2,500.00 2,442.68 2.3 10-45-490 PROFESSIONAL MEMBERSHIPS 10.00 6,867.52 7,000.00 132.48 98.1 10-45-500 OPERATING SUPPLIES 657.17 6,548.92 12,000.00 5,451.08 54.6 10-45-510 EQUIPMENT PURCHASE AND REPAIR .00 3,304.27 15,750.00 12,445.73 21.0 10-45-550 POSTAGE 168.00 1,126.38 2,000.00 873.62 56.3 10-45-560 UTILITIES -TELEPHONE 585.80 4,964.46 6,500.00 1,535.54 76.4 10-45-561 UTILITIES - NATURAL GAS 154.83 2,451.67 6,000.00 3,548.33 40.9 10-45-562 UTILITIES - ELECTRICITY 340.92 3,471.88 7,000.00 3,528.12 49.6 10-45-569 UTILITIES - TRASH REMOVAL 108.61 875.83 2,500.00 1,624.17 35.0 10-45-670 PROP MGMT - 107 EISENHOWER DR 603.36 10,061.45 29,000.00 18,938.55 34.7 10-45-671 PROP MGMT - 105 FRASER AVE .00 2,309.35 500.00 ( 1,809.35)461.9 10-45-673 PROP MGMT - 153 FRASER AVE 111.00 3,633.37 20,000.00 16,366.63 18.2 10-45-674 PROP MGMT - 200 EISENHOWER DR .00 .00 1,000.00 1,000.00 .0 10-45-676 PROP MGMT - 400 DOC SUSIE AVE .00 110.53 500.00 389.47 22.1 10-45-690 MISCELLANEOUS EXPENSE .00 1,000.00 8,000.00 7,000.00 12.5 10-45-810 LEASE/PURCHASE - PRINCIPAL .00 20,206.87 20,207.00 .13 100.0 10-45-820 LEASE/PURCHASE - INTEREST .00 18,166.89 18,167.00 .11 100.0 TOTAL ADMINISTRATION 40,530.80 536,760.60 908,889.00 372,128.40 59.1 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 GENERAL FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 7 PUBLIC WORKS 10-60-110 SALARIES 33,395.81 290,468.85 410,296.00 119,827.15 70.8 10-60-210 HEALTH INSURANCE 6,734.86 63,490.01 75,000.00 11,509.99 84.7 10-60-220 FICA TAX 2,431.88 21,042.59 31,388.00 10,345.41 67.0 10-60-230 RETIREMENT 1,011.10 8,833.53 16,412.00 7,578.47 53.8 10-60-250 UNEMPLOYMENT TAX 100.71 878.93 1,231.00 352.07 71.4 10-60-260 WORKERS COMP CLAIMS 63.12 370.51 .00 ( 370.51).0 10-60-280 TRAINING PROGRAMS .00 804.25 2,000.00 1,195.75 40.2 10-60-290 TRAVEL, MEALS AND LODGING 17.72 697.22 2,000.00 1,302.78 34.9 10-60-295 MEALS AND ENTERTAINMENT 33.87 287.11 750.00 462.89 38.3 10-60-330 ENGINEERING FEES 2,013.82 5,304.27 45,000.00 39,695.73 11.8 10-60-360 COMPUTER NETWORK SUPPORT .00 1,270.00 2,000.00 730.00 63.5 10-60-370 OTHER PROFESSIONAL SERVICES 160.00 3,678.00 2,500.00 ( 1,178.00)147.1 10-60-480 EQUIPMENT RENTAL .00 .00 2,500.00 2,500.00 .0 10-60-490 PROFESSIONAL MEMBERSHIPS .00 440.75 750.00 309.25 58.8 10-60-500 OPERATING SUPPLIES 3,629.82 43,499.16 75,000.00 31,500.84 58.0 10-60-506 PLANTS/PLANTER SUPPLIES 563.11 8,201.46 12,000.00 3,798.54 68.4 10-60-510 EQUIPMENT PURCHASE AND REPAIR 15,065.03 41,135.86 35,000.00 ( 6,135.86)117.5 10-60-560 UTILITIES - TELEPHONE 216.09 2,896.85 2,700.00 ( 196.85)107.3 10-60-561 UTILITIES - NATURAL GAS 130.87 3,530.73 6,000.00 2,469.27 58.9 10-60-562 UTILITIES - ELECTRICITY 131.00 1,218.34 3,000.00 1,781.66 40.6 10-60-569 UTILITIES - TRASH REMOVAL 278.31 1,358.36 2,100.00 741.64 64.7 10-60-670 PROP MGMT - 125 FRASER AVE .00 461.69 5,000.00 4,538.31 9.2 10-60-673 PROP MGMT - FRASER RIVER TRAIL 243.94 9,525.18 13,000.00 3,474.82 73.3 10-60-674 PROP MGMT - HWY 40 PEDESTRIAN .00 .00 18,000.00 18,000.00 .0 10-60-675 PROP MGMT - KOPPERS PARK 40.00 40.00 .00 ( 40.00).0 10-60-676 PROP MGMT - OLD SCHLHOUSE PK .00 866.17 5,000.00 4,133.83 17.3 10-60-678 PROP MGMT - OUTDOORACTIVITYCTR .00 51.07 .00 ( 51.07).0 10-60-679 PROP MGMT - SCHOOL BUS GARAGE 132.44 2,508.50 7,000.00 4,491.50 35.8 10-60-681 PROP MGMT - COZENS RANCH PARK 39,688.08 70,190.85 230,000.00 159,809.15 30.5 10-60-684 PROP MGMT - FRODO .00 .00 5,000.00 5,000.00 .0 10-60-685 PROP MGMT - MTN MAN PARK 700.00 700.00 500.00 ( 200.00)140.0 10-60-686 GORANSON STATION .00 1,248.11 1,500.00 251.89 83.2 10-60-690 MISCELLANEOUS EXPENSE .00 1,410.67 1,500.00 89.33 94.0 10-60-725 STREET IMPROVEMENTS 2,510.32 11,741.78 285,000.00 273,258.22 4.1 10-60-730 CAPITAL PROJECTS .00 .00 10,000.00 10,000.00 .0 TOTAL PUBLIC WORKS 109,291.90 598,150.80 1,309,127.00 710,976.20 45.7 120 ZEREX AVENUE 10-65-380 JANITORIAL SERVICES 450.00 3,500.00 5,610.00 2,110.00 62.4 10-65-561 UTILITIES - NATURAL GAS 48.02 723.23 1,515.00 791.77 47.7 10-65-562 UTILITIES - ELECTRICITY 64.39 536.77 1,010.00 473.23 53.2 10-65-670 PROP MGMT - 120 ZEREX .00 207.00 5,000.00 4,793.00 4.1 TOTAL 120 ZEREX AVENUE 562.41 4,967.00 13,135.00 8,168.00 37.8 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 GENERAL FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 8 TRANSFERS 10-90-935 TRANSFER TO CAF .00 50,000.00 50,000.00 .00 100.0 10-90-940 TRANSFER TO DEBT SERVICE FUND .00 246,550.00 246,550.00 .00 100.0 TOTAL TRANSFERS .00 296,550.00 296,550.00 .00 100.0 FISCAL AGENT 10-95-110 SALARIES 186.30 6,569.34 .00 ( 6,569.34).0 10-95-210 HEALTH INSURANCE .00 1,920.60 .00 ( 1,920.60).0 10-95-220 FICA TAX 14.26 492.33 .00 ( 492.33).0 10-95-230 RETIREMENT 1.85 196.37 .00 ( 196.37).0 10-95-250 UNEMPLOYMENT TAX .56 19.83 .00 ( 19.83).0 10-95-560 TELEPHONE .00 43.00 .00 ( 43.00).0 TOTAL FISCAL AGENT 202.97 9,241.47 .00 ( 9,241.47).0 TOTAL FUND EXPENDITURES 192,913.30 1,915,131.51 3,402,054.00 1,486,922.49 56.3 NET REVENUE OVER EXPENDITURES 39,962.26 2,004,945.40 943,524.00 ( 1,061,421.40)212.5 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 CONSERVATION TRUST FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 9 ASSETS 20-10100 CASH - COMBINED FUND 19,407.01 TOTAL ASSETS 19,407.01 LIABILITIES AND EQUITY FUND EQUITY UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD 19,407.01 BALANCE - CURRENT DATE 19,407.01 TOTAL FUND EQUITY 19,407.01 TOTAL LIABILITIES AND EQUITY 19,407.01 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 CONSERVATION TRUST FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 10 REVENUE 20-30-100 CONS TRUST (LOTTERY) PROCEEDS .00 2,900.15 6,500.00 3,599.85 44.6 20-30-800 INTEREST EARNINGS 1.41 11.89 15.00 3.11 79.3 20-30-999 UNASSIGNED FUND BALANCE .00 16,494.97 6,899.00 ( 9,595.97)239.1 TOTAL REVENUE 1.41 19,407.01 13,414.00 ( 5,993.01)144.7 TOTAL FUND REVENUE 1.41 19,407.01 13,414.00 ( 5,993.01)144.7 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 CONSERVATION TRUST FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 11 EXPENDITURES 20-40-920 TRANSFER TO OTHER FUNDS .00 .00 10,000.00 10,000.00 .0 TOTAL EXPENDITURES .00 .00 10,000.00 10,000.00 .0 TOTAL FUND EXPENDITURES .00 .00 10,000.00 10,000.00 .0 NET REVENUE OVER EXPENDITURES 1.41 19,407.01 3,414.00 ( 15,993.01)568.5 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 CAPITAL EQUIP REPLACEMENT FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 12 ASSETS 30-10100 CASH - COMBINED FUND 453,342.97 TOTAL ASSETS 453,342.97 LIABILITIES AND EQUITY FUND EQUITY UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD 453,342.97 BALANCE - CURRENT DATE 453,342.97 TOTAL FUND EQUITY 453,342.97 TOTAL LIABILITIES AND EQUITY 453,342.97 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 CAPITAL EQUIP REPLACEMENT FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 13 REVENUE 30-30-100 HWY USE TAX PROCEEDS 4,149.15 30,079.14 45,039.00 14,959.86 66.8 30-30-800 INTEREST EARNINGS 74.64 455.32 300.00 ( 155.32)151.8 30-30-920 TRANSFER FROM UTILITY FUNDS .00 20,000.00 20,000.00 .00 100.0 30-30-999 UNASSIGNED FUND BALANCE .00 465,578.04 464,835.00 ( 743.04)100.2 TOTAL REVENUE 4,223.79 516,112.50 530,174.00 14,061.50 97.4 TOTAL FUND REVENUE 4,223.79 516,112.50 530,174.00 14,061.50 97.4 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 CAPITAL EQUIP REPLACEMENT FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 14 EXPENDITURES 30-40-745 PUBLIC SAFETY FLEET PURCHASE .00 8,312.50 48,000.00 39,687.50 17.3 30-40-750 REGULAR FLEET PURCHASE .00 9,039.16 90,000.00 80,960.84 10.0 30-40-755 HEAVY EQUIPMENT PURCHASE .00 .00 20,000.00 20,000.00 .0 30-40-810 LEASE/PURCHASE - PRINCIPAL .00 42,014.94 42,015.00 .06 100.0 30-40-820 LEASE/PURCHASE - INTEREST .00 3,402.93 3,403.00 .07 100.0 TOTAL EXPENDITURES .00 62,769.53 203,418.00 140,648.47 30.9 TOTAL FUND EXPENDITURES .00 62,769.53 203,418.00 140,648.47 30.9 NET REVENUE OVER EXPENDITURES 4,223.79 453,342.97 326,756.00 ( 126,586.97)138.7 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 CAPITAL ASSET FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 15 ASSETS 32-10100 CASH - COMBINED FUND 585,400.26 TOTAL ASSETS 585,400.26 LIABILITIES AND EQUITY FUND EQUITY UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD 585,400.26 BALANCE - CURRENT DATE 585,400.26 TOTAL FUND EQUITY 585,400.26 TOTAL LIABILITIES AND EQUITY 585,400.26 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 CAPITAL ASSET FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 16 CAPITAL ASSET REVENUE 32-30-100 RESERVED FOR FUTURE USE .00 1,117,804.91 1,420,000.00 302,195.09 78.7 32-30-800 INTEREST EARNINGS 118.30 896.91 250.00 ( 646.91)358.8 32-30-910 TRANSFER IN FROM GENERAL FUND .00 50,000.00 50,000.00 .00 100.0 32-30-999 UNASSIGNED FUND BALANCE .00 671,470.94 667,788.00 ( 3,682.94)100.6 TOTAL CAPITAL ASSET REVENUE 118.30 1,840,172.76 2,138,038.00 297,865.24 86.1 TOTAL FUND REVENUE 118.30 1,840,172.76 2,138,038.00 297,865.24 86.1 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 CAPITAL ASSET FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 17 CAPITAL ASSET EXPENDITURES 32-40-815 CAPITAL PROJ - STREETS NEW 25,432.53 1,254,772.50 2,138,038.00 883,265.50 58.7 TOTAL CAPITAL ASSET EXPENDITURES 25,432.53 1,254,772.50 2,138,038.00 883,265.50 58.7 TOTAL FUND EXPENDITURES 25,432.53 1,254,772.50 2,138,038.00 883,265.50 58.7 NET REVENUE OVER EXPENDITURES ( 25,314.23)585,400.26 .00 ( 585,400.26).0 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 DEBT SERVICE FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 18 ASSETS 40-10100 CASH - COMBINED FUND 641,441.72 40-10290 CASH WITH TREASURER 251.52 40-11100 PROPERTY TAXES RECEIVABLE 80,000.00 TOTAL ASSETS 721,693.24 LIABILITIES AND EQUITY LIABILITIES 40-22210 DEFERRED PROPERTY TAXES 80,000.00 TOTAL LIABILITIES 80,000.00 FUND EQUITY 40-27000 RESTRICTED FUND BALANCE 300,000.00 40-27100 UNASSIGNED FUND BALANCE 245,940.84 UNAPPROPRIATED FUND BALANCE: REVENUE OVER EXPENDITURES - YTD 95,752.40 BALANCE - CURRENT DATE 95,752.40 TOTAL FUND EQUITY 641,693.24 TOTAL LIABILITIES AND EQUITY 721,693.24 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 DEBT SERVICE FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 19 REVENUE 40-30-100 PROPERTY TAX 2,412.03 79,736.75 80,000.00 263.25 99.7 40-30-200 SPECIFIC OWNERSHIP TAX 541.89 3,485.36 3,000.00 ( 485.36)116.2 40-30-800 INTEREST EARNINGS 84.50 635.05 250.00 ( 385.05)254.0 40-30-910 TRANSFER IN FROM GENERAL FUND .00 246,550.00 246,550.00 .00 100.0 TOTAL REVENUE 3,038.42 330,407.16 329,800.00 ( 607.16)100.2 TOTAL FUND REVENUE 3,038.42 330,407.16 329,800.00 ( 607.16)100.2 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 DEBT SERVICE FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 20 EXPENDITURES 40-40-385 TREASURER'S FEES GO BOND 48.25 1,594.76 2,000.00 405.24 79.7 40-40-810 BOND PRINCIPAL - 02 S&U ISSUE .00 25,000.00 25,000.00 .00 100.0 40-40-811 BOND PRINCIPAL - 98 GO ISSUE .00 .00 45,000.00 45,000.00 .0 40-40-812 BOND PRINCIPAL - 98 S&U ISSUE .00 180,000.00 180,000.00 .00 100.0 40-40-820 BOND INTEREST - 02 S&U ISSUE .00 3,162.50 5,638.00 2,475.50 56.1 40-40-821 BOND INTEREST - 98 GO ISSUE .00 3,762.50 7,526.00 3,763.50 50.0 40-40-822 BOND INTEREST - 98 S&U ISSUE .00 20,385.00 35,910.00 15,525.00 56.8 40-40-850 BOND AGENT FEES .00 750.00 3,000.00 2,250.00 25.0 40-40-910 TRANSFER TO DSF RESERVES .00 .00 25,726.00 25,726.00 .0 TOTAL EXPENDITURES 48.25 234,654.76 329,800.00 95,145.24 71.2 TOTAL FUND EXPENDITURES 48.25 234,654.76 329,800.00 95,145.24 71.2 NET REVENUE OVER EXPENDITURES 2,990.17 95,752.40 .00 ( 95,752.40).0 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 WATER FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 21 ASSETS 50-10100 CASH - COMBINED FUND 1,461,430.28 50-11500 A/R CUSTOMER SERVICE CHARGES 199,479.94 50-16100 LAND 100,000.00 50-16200 BUILDINGS 2,946,174.49 50-16203 WELLS SYSTEM 768,371.74 50-16212 WATER DISTRIBUTION/STORAGE 9,845,211.82 50-16213 WELLS 1,076,740.43 50-16400 EQUIPMENT 353,994.02 50-16500 WATER RIGHTS 19,775.86 50-17900 ACCUMULATED DEPRECIATION ( 3,568,312.67) 50-17901 ACCUMULATED DEPR - BLDGS& IMPR ( 145,747.00) 50-17902 ACCUMULATED DEPR - SYSTEM&IMPR ( 601,534.00) TOTAL ASSETS 12,455,584.91 LIABILITIES AND EQUITY LIABILITIES 50-20775 DUE TO RENDEZVOUS - TAPS 84,700.00 50-20776 DUE TO GRAND PARK - TAPS 46,200.00 50-21100 ACCRUED PTO AND BENEFITS 4,746.10 50-22910 ROAD CUT SURITY FEES 12,800.00 50-22920 BULK WATER SECURITY DEP 7,500.00 TOTAL LIABILITIES 155,946.10 FUND EQUITY 50-27000 COMMITTED FUND BALANCE 460,000.00 UNAPPROPRIATED FUND BALANCE: 50-29800 RETAINED EARNINGS 10,794,683.01 REVENUE OVER EXPENDITURES - YTD 1,044,955.80 BALANCE - CURRENT DATE 11,839,638.81 TOTAL FUND EQUITY 12,299,638.81 TOTAL LIABILITIES AND EQUITY 12,455,584.91 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 WATER FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 22 LICENSES & PERMITS 50-32-100 EXCAVATION PERMIT FEES .00 275.00 275.00 .00 100.0 TOTAL LICENSES & PERMITS .00 275.00 275.00 .00 100.0 CHARGES FOR SERVICES 50-34-100 CUSTOMER SERVICE CHARGES 202,292.05 587,141.57 760,040.00 172,898.43 77.3 50-34-150 PENALTIES & INTEREST 34.00 2,217.76 1,000.00 ( 1,217.76)221.8 50-34-200 PLANT INVESTMENT FEES .00 15,400.00 15,400.00 .00 100.0 50-34-300 WATER METER SALES 8,695.00 34,168.69 2,000.00 ( 32,168.69)1708.4 TOTAL CHARGES FOR SERVICES 211,021.05 638,928.02 778,440.00 139,511.98 82.1 MISCELLANEOUS REVENUE 50-36-100 INTEREST EARNINGS 188.71 1,331.94 800.00 ( 531.94)166.5 50-36-900 MISCELLANEOUS REVENUE 150.00 2,941.25 2,500.00 ( 441.25)117.7 TOTAL MISCELLANEOUS REVENUE 338.71 4,273.19 3,300.00 ( 973.19)129.5 OTHER SOURCES & TRANSFERS 50-39-200 GRANTS AND AID FROM AGENCIES .00 50,000.00 25,000.00 ( 25,000.00)200.0 50-39-910 TRANSFERS IN .00 .00 50,000.00 50,000.00 .0 50-39-999 UNASSIGNED FUND BALANCE .00 766,652.00 720,401.00 ( 46,251.00)106.4 TOTAL OTHER SOURCES & TRANSFERS .00 816,652.00 795,401.00 ( 21,251.00)102.7 TOTAL FUND REVENUE 211,359.76 1,460,128.21 1,577,416.00 117,287.79 92.6 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 WATER FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 23 EXPENDITURES 50-40-110 SALARIES 14,821.45 138,934.14 185,000.00 46,065.86 75.1 50-40-210 HEALTH INSURANCE 2,140.60 21,323.35 26,000.00 4,676.65 82.0 50-40-220 FICA TAX 1,098.68 10,290.78 14,153.00 3,862.22 72.7 50-40-230 RETIREMENT 470.14 4,587.59 6,500.00 1,912.41 70.6 50-40-250 UNEMPLOYMENT TAX 44.05 418.18 555.00 136.82 75.4 50-40-280 TRAINING PROGRAMS .00 299.00 3,000.00 2,701.00 10.0 50-40-290 TRAVEL, MEALS AND LODGING .00 100.30 3,000.00 2,899.70 3.3 50-40-295 MEALS AND ENTERTAINMENT .00 81.28 2,000.00 1,918.72 4.1 50-40-310 LEGAL FEES .00 46,608.25 75,000.00 28,391.75 62.1 50-40-330 ENGINEERING FEES .00 13,856.00 10,000.00 ( 3,856.00)138.6 50-40-360 COMPUTERS-NETWORKS AND SUPPORT 342.33 4,651.06 6,000.00 1,348.94 77.5 50-40-370 OTHER PROFESSIONAL SERVICES 35.75 345.17 5,000.00 4,654.83 6.9 50-40-430 INSURANCE .00 17,084.32 20,000.00 2,915.68 85.4 50-40-440 ADVERTISING .00 240.66 500.00 259.34 48.1 50-40-460 SYSTEM REPAIR AND MAINT - PROD .00 4,746.99 75,000.00 70,253.01 6.3 50-40-465 SYSTEM REPAIR AND MAINT - DIST 4.63 4,835.25 70,000.00 65,164.75 6.9 50-40-490 PROFESSIONAL MEMBERSHIPS .00 8,420.00 8,000.00 ( 420.00)105.3 50-40-500 OPERATING SUPPLIES-PRODUCTION 337.37 7,780.80 35,000.00 27,219.20 22.2 50-40-505 OPERATING SUPPLIES-DISTRIB 260.20 32,469.84 25,000.00 ( 7,469.84)129.9 50-40-510 EQUIPMENT PURCHASE AND REPAIR 30,170.50 30,997.04 10,000.00 ( 20,997.04)310.0 50-40-520 TESTING .00 768.44 10,000.00 9,231.56 7.7 50-40-550 POSTAGE & BILLING SUPPLIES .00 750.00 2,500.00 1,750.00 30.0 50-40-560 UTILITIES - TELEPHONE 331.39 3,316.03 3,500.00 183.97 94.7 50-40-562 UTILITIES - ELECTRICITY 2,805.29 21,823.45 55,000.00 33,176.55 39.7 50-40-670 PROP MGMT - FRASER WTP .00 1,032.76 3,000.00 1,967.24 34.4 50-40-680 PROP MGMT - MARYVALE WTP .00 406.97 3,000.00 2,593.03 13.6 50-40-690 MISCELLANEOUS EXPENSE .00 8.99 2,000.00 1,991.01 .5 50-40-715 WATER RIGHTS - DIVERSION & DEV .00 6,481.87 15,000.00 8,518.13 43.2 50-40-730 CAPITAL PROJECTS .00 6,657.50 204,000.00 197,342.50 3.3 50-40-760 FRASER FIRMING - CAPPROJ .00 15,856.40 680,000.00 664,143.60 2.3 50-40-930 TRANSFER TO CERF .00 10,000.00 10,000.00 .00 100.0 TOTAL EXPENDITURES 52,862.38 415,172.41 1,567,708.00 1,152,535.59 26.5 TOTAL FUND EXPENDITURES 52,862.38 415,172.41 1,567,708.00 1,152,535.59 26.5 NET REVENUE OVER EXPENDITURES 158,497.38 1,044,955.80 9,708.00 ( 1,035,247.80)10763. TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 WASTEWATER FUND FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 24 ASSETS 55-10100 CASH - COMBINED FUND 3,225,435.06 55-11500 A/R CUSTOMER SERVICE CHARGES 166,697.95 55-11550 A/R- BILLINGS 7,250.00 55-15950 CAP REPL RES HELD W/JFOC 760,929.23 55-15955 O&M RESERVE HELD W/JFOC 46,920.69 55-16100 LAND 144,320.40 55-16200 SEWER TREATMENT PLANT 3,308,298.56 55-16210 METER BUILDING & IMPROVEMENTS 8,056.39 55-16220 SEWER COLLECTION SYSTEM 10,816,277.19 55-16250 CONSOLIDATED COLLECTION SYSTEM 279,069.00 55-16400 EQUIPMENT 98,106.17 55-17900 ACCUMULATED DEPRECIATION ( 884,726.42) 55-17905 ACCUM DEPR - PLANT/JFOC ( 48,836.52) 55-17910 ACCUM DEPR - SEWER COLLECT-FSD ( 3,629,247.72) 55-17915 ACCUM DEPR-EQUIPMENT ( 42,697.20) TOTAL ASSETS 14,255,852.78 LIABILITIES AND EQUITY LIABILITIES 55-21100 ACCRUED PTO AND BENEFITS 4,769.34 TOTAL LIABILITIES 4,769.34 FUND EQUITY UNAPPROPRIATED FUND BALANCE: 55-29800 RETAINED EARNINGS 10,048,619.90 55-29820 RETAINED EARNINGS - RESTRICTED 807,849.92 REVENUE OVER EXPENDITURES - YTD 3,394,613.62 BALANCE - CURRENT DATE 14,251,083.44 TOTAL FUND EQUITY 14,251,083.44 TOTAL LIABILITIES AND EQUITY 14,255,852.78 TOWN OF FRASER REVENUES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 WASTEWATER FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEARNED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 25 CHARGES FOR SERVICES 55-34-100 CUSTOMER SERVICE CHARGES 160,980.82 479,323.92 637,184.00 157,860.08 75.2 55-34-150 PENALTIES & INTEREST 22.99 2,067.52 1,000.00 ( 1,067.52)206.8 55-34-200 PLANT INVESTMENT FEES 52,500.00 255,000.00 15,000.00 ( 240,000.00)1700.0 TOTAL CHARGES FOR SERVICES 213,503.81 736,391.44 653,184.00 ( 83,207.44)112.7 MISCELLANEOUS REVENUE 55-36-100 INTEREST EARNINGS 473.18 3,348.21 3,000.00 ( 348.21)111.6 55-36-500 JFF MANAGEMENT FEE 7,250.00 21,750.00 29,000.00 7,250.00 75.0 TOTAL MISCELLANEOUS REVENUE 7,723.18 25,098.21 32,000.00 6,901.79 78.4 OTHER SOURCES & TRANSFERS 55-39-999 UNASSIGNED FUND BALANCE .00 3,011,956.00 2,968,217.00 ( 43,739.00)101.5 TOTAL OTHER SOURCES & TRANSFERS .00 3,011,956.00 2,968,217.00 ( 43,739.00)101.5 TOTAL FUND REVENUE 221,226.99 3,773,445.65 3,653,401.00 ( 120,044.65)103.3 TOWN OF FRASER EXPENDITURES WITH COMPARISON TO BUDGET FOR THE 9 MONTHS ENDING SEPTEMBER 30, 2015 WASTEWATER FUND PERIOD ACTUAL YTD ACTUAL BUDGET UNEXPENDED PCNT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 26 EXPENDITURES 55-40-110 SALARIES 15,097.41 142,023.98 195,000.00 52,976.02 72.8 55-40-210 HEALTH INSURANCE 2,187.78 21,687.77 28,000.00 6,312.23 77.5 55-40-220 FICA TAX 1,118.71 10,522.64 14,918.00 4,395.36 70.5 55-40-230 RETIREMENT 481.16 4,719.97 7,000.00 2,280.03 67.4 55-40-250 UNEMPLOYMENT TAX 44.89 427.50 585.00 157.50 73.1 55-40-280 TRAINING PROGRAMS .00 200.00 2,500.00 2,300.00 8.0 55-40-290 TRAVEL, MEALS AND LODGING .00 20.49 2,500.00 2,479.51 .8 55-40-295 MEALS AND ENTERTAINMENT .00 68.21 1,000.00 931.79 6.8 55-40-310 LEGAL FEES .00 693.25 15,000.00 14,306.75 4.6 55-40-330 ENGINEERING FEES .00 3,888.50 10,000.00 6,111.50 38.9 55-40-360 COMPUTERS-NETWORKS AND SUPPORT 350.00 3,555.20 6,000.00 2,444.80 59.3 55-40-370 OTHER PROFESSIONAL SERVICES 35.75 298.74 10,000.00 9,701.26 3.0 55-40-410 BANK CHARGES .00 .00 100.00 100.00 .0 55-40-430 INSURANCE .00 4,404.60 6,500.00 2,095.40 67.8 55-40-440 ADVERTISING .00 92.62 500.00 407.38 18.5 55-40-460 SYSTEM REPAIR AND MAINT-COLLEC .00 74,563.59 130,000.00 55,436.41 57.4 55-40-490 PROFESSIONAL MEMBERSHIPS .00 55.00 6,000.00 5,945.00 .9 55-40-500 OPERATING SUPPLIES-COLLECTIONS .00 241.65 5,000.00 4,758.35 4.8 55-40-510 EQUIPMENT PURCHASE AND REPAIR .00 280.17 5,000.00 4,719.83 5.6 55-40-520 TESTING .00 .00 1,000.00 1,000.00 .0 55-40-550 POSTAGE & BILLING SUPPLIES .00 750.00 3,000.00 2,250.00 25.0 55-40-560 UTILITIES - TELEPHONE 115.16 1,415.40 500.00 ( 915.40)283.1 55-40-650 WW TREATMENT CHARGES/JFOC 12,442.16 96,096.39 209,833.00 113,736.61 45.8 55-40-690 MISCELLANEOUS EXPENSE .00 .00 3,000.00 3,000.00 .0 55-40-730 CAPITAL PROJECTS 2,804.00 2,826.36 370,000.00 367,173.64 .8 55-40-930 TRANSFER TO CERF .00 10,000.00 10,000.00 .00 100.0 TOTAL EXPENDITURES 34,677.02 378,832.03 1,042,936.00 664,103.97 36.3 TOTAL FUND EXPENDITURES 34,677.02 378,832.03 1,042,936.00 664,103.97 36.3 NET REVENUE OVER EXPENDITURES 186,549.97 3,394,613.62 2,610,465.00 ( 784,148.62)130.0 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 GENERAL FIXED ASSETS FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 27 ASSETS 91-16100 LAND 730,630.35 91-16200 ADMINISTRATION BUILDING 208,379.39 91-16203 MAINTENANCE BUILDING 57,722.51 91-16208 HOUSE - 400 DOC SUSIE AVE 54,839.27 91-16209 VISITOR CENTER 183,895.00 91-16211 BUSBARN & 105 FRASER AVE HOUSE 100,000.00 91-16250 CHURCH 267,000.00 91-16306 PARKS 367,800.08 91-16311 STREET IMPROVEMENTS 3,439,840.00 91-16312 HIGHWAY 40 PATH 8,872.00 91-16490 EQUIPMENT - OTHER 872,015.00 91-16500 OFFICE EQUIPMENT 57,261.75 91-17900 ACCUMULATED DEPRECIATION ( 2,260,048.61) TOTAL ASSETS 4,088,206.74 LIABILITIES AND EQUITY FUND EQUITY UNAPPROPRIATED FUND BALANCE: 91-29800 INVESTMENT IN FIXED ASSETS 4,088,206.74 BALANCE - CURRENT DATE 4,088,206.74 TOTAL FUND EQUITY 4,088,206.74 TOTAL LIABILITIES AND EQUITY 4,088,206.74 TOWN OF FRASER BALANCE SHEET SEPTEMBER 30, 2015 GENERAL LONG-TERM DEBT FOR ADMINISTRATION USE ONLY 75 % OF THE FISCAL YEAR HAS ELAPSED 10/17/2015 10:00PM PAGE: 28 ASSETS 95-18100 AMOUNT TO BE PROVIDED 3,131,161.31 TOTAL ASSETS 3,131,161.31 LIABILITIES AND EQUITY LIABILITIES 95-25050 2002 SERIAL BONDS 360,000.00 95-25060 1998 REVENUE REFUNDING BONDS 2,035,000.00 95-25070 1998 GENERAL OBLIGATION BONDS 475,000.00 95-25200 ACCRUED COMPENSATED ABSENCES 15,677.17 95-25500 CAPITAL LEASES KOMATSU LOADER 245,484.14 TOTAL LIABILITIES 3,131,161.31 TOTAL LIABILITIES AND EQUITY 3,131,161.31 GRAND ENTERPRISE INITIATIVE Grand Enterprise Initiative c/o Kapoks 855 Timber Lane Boulder,CO 80304 Sept.22,2015 Mayor Peggy Smith and Board of Trustees Town of Fraser P.O. Box 370 Fraser, CO 80442 Dear Mayor Smith and Board Members: Thank you considering support for the Grand Enterprise Initiative in 2016.Your support will help us provide free and confidential business coaching and networking support to community members wanting to start or expand businesses in Fraser and Grand County.The Grand Enterprise Initiative will continue to support the development of stronger communities in Grand County in 2016 by nurturing entrepreneurs one business at a time. The Grand Enterprise Initiative has worked with 16 clients in Fraser since going countywide in 2012. We have helped retain jobs in the Fraser area by working with one business acquisition,one expansion,one new business project,minor business tune-ups and working with clients on issues relating to business sustainability and business concepts.One of our clients moved a Granby business to Fraser last year and that business continues to operate in Fraser.Our free and confidential business coach,Patrick Brower,has had a total of 70 client visits with Fraser-based entrepreneurs.Please see the attached Grand Enterprise Initiative Program Statistics for further detail on our activity in Fraser and the rest of the county. We would like the town of Fraser to consider collaboratively funding the Grand Enterprise Initiative in 2016 for the amount of$10,000.The Grand Enterprise Initiative's other funders include the Town of Granby,Grand County,the Town of Winter Park,the Grand Foundation and the Freeport-McMoran Copper and Gold Foundation.We are also pursuing funding from each of the towns in Grand County for 2016.The Grand Enterprise Initiative is cost-effective,utilizing only one full time paid contractor and a large,active volunteer base. The Grand Enterprise Initiative is a division of Kapoks,a Colorado based 501 (c)(3)with a mission to inspire and empower communities to reach their full potential through economic development and promotion of the entrepreneurial spirit. Thank you again for considering this request. We intend to schedule time at one of your upcoming board or committee meetings to discuss our program and our request. Sincer 1 I / / / L iyri er Pierro Chair,Manageme t Team Grand Enterprise Initiative Grand Enterprise Initiative In Fraser Total Clients New Businesses Jobs Created 16 2 4 16 clients represents 8% of the total number of clients for the county wide initiative. For the life of the project in Fraser, Enterprise Facilitator Patrick Brower and his Grand Enterprise Initiative Resource Team have also worked with: • 2 business expansions • 8 minor tune-ups • 3 pending new businesses These tune-ups and expansions have helped to retain 14 jobs. Dollars and Cents Clients working with the Grand Enterprise Initiative have contributed the following to the local economy: New Capital New Sales $30,000 $225,000 Grand Enterprise Initiative, P.O. Box 1135, Granby, Colorado 80446 Enterprise Facilitator, Patrick Brower, 970-531-0632 patrickbrower@kapoks.org Grandei.org Grand Enterprise Initiative Building Strong Communities In Grand County, One Entrepreneur At A Time! The Grand Enterprise Initiative offers FREE and CONFIDENTIAL business management coaching to anyone wanting to start or expand a business in Grand County. It is a community-based non-profit. In its fourth year, the Initiative has had an impact on Grand County's economy: Total Clients New Businesses Jobs Created 203 24 79 For the life of the project, Enterprise Facilitator Patrick Brower and his Grand Enterprise Initiative Resource Team have also worked with: • 30 business expansions • 13 diversifications • 3 acquisitions (several pending) • 32 minor tune-ups Grand Enterprise Initiative, P.O. Box 1135, Granby, Colorado 80446 Enterprise Facilitator, Patrick Brower, 970-531-0632 patrickbrower@kapoks.org Grandei.org GRAND ENTERPRISE INITIATIVE Grand Enterprise Initiative Profit & Loss Budget Overview January through December 2016 110GrandEl (100Programs) Total 100Programs 990RestrictedFunds TOTAL Jan-Dec 16 Jan -Dec 16 Jan-Dec 16 Jan-Dec 16 Ordinary Income/Expense Income 42000 • ContributionsNonGovGrants 42300 • Foundation&trust grants 22,500 22,500 Total 42000 • ContributionsNonGovGrants 22,500 22,500 43000 • ContributionsGovGrants 43300• Local government grants 64,000 64,000 Total 43000 • ContributionsGovGrants 64,000 64,000 Total Income 86,500 86,500 Gross Profit 86,500 86,500 Expense 70000 • ExpensesPersonnelRelated 71000 • Grant&contract expense 71200 • Contracts-program-related 64,890 64,890 64,890 Total 71000 •Grant&contract expense 64,890 64,890 64,890 75000 Contract Services 75200 •Accounting Fees 680 680 680 Total 75000 •Contract Services 680 680 680 Total 70000 • ExpensesPersonnelRelated 65,570 65,570 65,570 80000 • ExpensesNonpersonnelRelated 81000 • NonpersonnelExpenses 81100•Supplies 95 95 95 81300 •Telephone&telecomm 480 480 480 81400 • Postage,shipping,delivery 1,535 1,535 1,535 81700 • Printing©ing 1,580 1,580 1,580 Total 81000 • NonpersonnelExpenses 3,690 3,690 3,690 82000 • Facility&equipment expenses 82900• Donated facilities 860 860 860 Total 82000 • Facility&equipment expenses 860 860 860 83000•Travel&meetings expenses 83200• ConferencesConventionsMeetings 500 500 500 83300 • Client Meeting Expense 400 400 400 83400 •Automobile Mileage Expense 4,800 4,800 4,800 110GrandEl (100Programs) Total 100Programs 990RestrictedFunds TOTAL Jan-Dec 16 Jan -Dec 16 Jan-Dec 16 Jan-Dec 16 Total 83000 •Travel&meetings expenses 5,700 5,700 5,700 85000 • Other expenses 85400 • Staff development 1,200 1,200 1,200 85700 • Advertising 3,500 3,500 3,500 Total 85000 •Other expenses 4,700 4,700 4,700 Total 80000 • ExpensesNonpersonnelRelated 14,950 14,950 14,950 Total Expense 80,520 80,520 80,520 Net Ordinary Income -80,520 -80,520 86,500 5,980 Other Income/Expense Other Expense 90000 • NonGAAPExpenses 99200 • Additions to reserves 1,680 1,680 1,680 99300 • Program admin(5%of direct) 4,200 4,200 4,200 Total 90000 • NonGAAPExpenses 5,880 5,880 5,880 Total Other Expense 5,880 5,880 5,880 Net Other Income -5,880 -5,880 0 -5,880 Net Income -86,400 -86,400 86,500 100 Page 2