City Council Work Session — May 26, 2026

! Will the City Manager please provide a review of tonight's work session agenda?

! Yes, thank you, Mayor. Good evening, everyone. ! We have two items this evening. ! Your agenda is as it was published. ! We didn't have any changes. ! First, we'll be kind of a two-part discussion. ! We'll be talking about the 27-28 budget. First, focused on the utility rates and then on more general revenue assumptions. First focused on the utility rates and then on more general revenue assumptions. And then our second item this evening is a discussion on the Front Range Passenger Rail Project. So if you're ready, Mayor, I'll go ahead and turn it over to Caleb Weitz, our Chief Financial Officer, to get us started on our first item.

Good evening, Mayor and Council. It's a pleasure to be here this evening. Joined by a number of folks from our finance team, Joe Wimmer, who's our Utilities Finance Director,

Victoria Shaw our budget director and Jen Poznanovich our revenue director as Kelly mentioned we have really two parts to tonight's presentation the first

we'll be focusing on utility rates and then more of a informational update for council on what we're currently seeing with our governmental fund revenue assumptions so just the questions for council to keep in mind as we go through THIS PRESENTATION TONIGHT. I WILL SAY THE MOST TIMELY PIECE OF THIS IS AROUND THE UTILITY RATES. JOE IS GOING TO WALK COUNCIL THROUGH A COUPLE DIFFERENT SCENARIOS FOR RATES IN EACH OF OUR UTILITY FUNDS. THE KEY PIECE OF INFORMATION WE NEED FROM COUNCIL TONIGHT IS NOT NECESSARILY TO PICK A certain rate within those options but to provide feedback if there need to be other options outside of the band of options we're presenting tonight because if council wants to consider something very different than what staff is currently recommending that will take a good amount of work and we it's better for us to know that now so we can be prepared as we go into budget discussions this fall and then on the governmental fund side we're going to lay out staff's current thinking on the revenue forecast for next year. We are trying to balance conservatism in the revenue forecast to ensure that we are being appropriately cautious given the economic environment, but also having to balance that with the fact that we know we are facing a shortfall this year and trying to calibrate what the appropriate level of conservatism versus not being overly conservative and having to make more drastic decisions in the budget than are actually needed. And then finally, we'll have a little bit of information at the end of the presentation on staff's plans for engagement around the budget and would welcome council feedback on that as well.

So just very quickly to set the table before I turn it over to Joe on the utilities part, Just a quick reminder that the way that we talk about funds here in the city are in two major buckets.

The first are governmental funds, and these are generally going to be funds that are supported by tax revenue.

So you think about the city's general fund, which is our normal operations,

a number of special revenue funds which have a dedicated tax revenue source going into them in most cases.

We are also going to be focusing tonight on the enterprise funds, which are our fee-based cost recovery operations.

And primarily that is in our utility space.

Just a little bit about the economic picture. I will not go through this in detail, but we continue to be in this period of uncertainty. Today, the stock market, I think, is at a record high. Also, I read a news story this morning about historically low readings in consumer confidence. So there's a lot of conflicting signals right now, and that is definitely informing our cautious approach as we look at the national economy. In terms of the state and local economy, there's a couple things that are really giving us pause right now.

The first is, you know, the state just closed an over-a-billion-dollar budget deficit. A number of that, or a large portion of that fix in the deficit was with one-time funding sources,

so I expect that the state will have an equally, if not more, challenging budget discussion next year, which would occur six months into our fiscal year would be the start of their new budget year. in terms of other factors we are obviously i think everyone here at this table is aware of the challenges that some of our largest employers here in fort collins are facing with csu and pooter school district also having to grapple with budget gaps that could have potential

reductions in positions for those large employers so those are giving us pause as well as we know the importance of those jobs in the community translating into economic activity that translates into important revenue like sales tax. So at this point, we are looking at a fairly conservative approach to our projections for next year. While national trends, there are some positive things

to pick out. These local conditions with other factors, such as the really unknown implications of the Iran war and what that could do long term for energy prices and other impacts of that are just causing us to be in a conservative place at this point. So with that, I will go ahead and turn it over to Joe. Like Kelly said, this is really a two-part item.

So Joe is going to run through the utility rates recommendation and then the key piece

of feedback we're looking for from council is if there's any other rate scenarios that

you would like to see. Thank you, Caleb. So to elaborate a little bit on the process for our rates, we will be bringing forward our rates for adoption at the time the budget comes forward in November. And then we're doing one year at a time. So we'll adopt 2027 rates with the 2027 budget. And again in 2028. But since we're looking at a two year budget, we're planning these rates out for two years. And then as Caleb mentioned, with budget development right now, hoping to get GUIDANCE ON THESE RATES EARLY. SO STARTING WITH AN OVERVIEW OF ALL OF OUR CITY UTILITY FUNDS, EXCLUDING BROADBAND CONNECTION, EACH ONE OF THESE FUNDS IS ITS OWN UTILITY AND ENTERPRISE FUND UNDER OUR CHARTER IN THAT THE REVENUES FROM EACH UTILITY ONLY GO TO SUPPORT THAT REVENUE. SO THE WATER RATES AND FEES ONLY SUPPORT THE WATER FUND. THEY DON'T CROSS-SUBSIDIZE AND BUILD LIGHT AND POWER PROJECTS OR STORM WATER. here is a snapshot of the 2026 financials for each utility our utilities can vary in size as you can see with the customer accounts up there we know that we have water districts also serving our community so if we look at fort collins utilities we serve around 75 to 80 percent and we have water districts serving the other segment of our population stormwater reaches all our city limits so it has more customers and then the largest utility light and power with the largest customer account largely due to multi-family homes having individual meters per unit instead of receiving one water bill at one storm water bill so for each fund we're doing individual capital planning debt management and looking at reserves so each fund can be self-sufficient so we're going to spend some time talking about our capital improvement plans because these are so closely tied to our rate recommendations as these are the large projects that are really the rate drivers. So utilities have spent a lot of time this last year under our new executive leaders updating and refreshing our capital improvement plans to have a long-term plan that can help us with financial modeling and rate planning. A lot of that kudos goes to our One Water director, Nicole Ponslet-Johnson, who brought a best practice CIP development process to us that we call enterprise project management in which we have all of the utilities directors and staffs put together a list of projects they want to complete in 20 years. And then we have a two-day workshop really prioritizing those and ranking them with risk and reward criteria to come up with what are the most important projects for our utilities to do that can also be financially viable. So those full capital improvement plans that are updated were attached in the packets. A summary is here tonight for 27 and 28, as this is what we'll be moving forward in the budget. So I'll point out just a few of the highlights projects for each that are really most closely tied to our rate impacts. So for the water fund, that being our Halligan Reservoir project, $228 million up here for 27 and 28. It's a project that's been going on a long time.

We've spent nearly $50 million to date and would need this amount to continue the project through construction.

Another large project that splits both the water and wastewater fund is the water quality lab. So we're joining our water and wastewater lab services into one facility. This is under the water quality row there, $38 million project. This is one that's under design or soon to be under design And we've acquired land and are ready to move forward with that project in the next budget The other big category on our CIPs is the distribution and transmission Row here in the water fund so this represents our 600 miles of underground assets That best practice is to replace before those assets are failing and we're replacing them before the end of their useful life This is an easy thing for utilities to defer, and we're going to circle back to this on rates, and it's something that we can choose to invest more or less in depending on our rate scenarios.

So over to the wastewater fund, we again have that collection system, our underground assets that we need to replace.

The largest projects that are driving rates for the wastewater fund are in the water reclamation and biosolids category. So these are our wastewater treatment plants. We have two wastewater treatment plants, one Drake Water Reclamation Facility and one on Mulberry. The Drake Water Reclamation Facility has some very significant projects coming up in the next budget,

the largest one being preliminary treatment. This is the intake, the headworks, the very start of the treatment process, and that could be over a $100 million project for the wastewater fund.

THAT GROUP, THE WATER RECLAMATIONS AND BIOCELLULARIES GROUP JUST DID A MASTER PLANNING CONDITION

ASSESSMENT OF ALL THOSE ASSETS, AND IT CAME BACK THAT AROUND 50% OF THE ASSETS ARE BEYOND THE END OF USEFUL LIFE AND IN FAIR, POOR, OR VERY POOR CONDITIONS. SO A LOT OF INVESTMENTS NEEDED AT THE WASTED WATER TREATMENT PLANT. AND THEN AGAIN, WE'VE GOT THE WATER QUALITY LAB AND THE WASTED WATER CIP.

moving over to the stormwater fund we have we have a collection in detention those horizontal assets and then the also the large projects in stormwater are around flood protection and flood mitigation

projects so think the the large oak street project that we're nearing completion on

that was a 40 million dollar project we have some other large flood mitigation projects in 27 28 and it being North Mason Stormwater Project and Vine Drive Crossing. Now, those aren't the magnitude of that Oak Street project, but we do have in our CIPs in the long-range plan some other large

stormwater projects that will need some debt financing, and we'll circle back to that on rates.

And then lastly, I want to point out there's a technology line in each one of our CIPs. There

is a large amount in year one, and that's the utility share of the ERP project that we talked ABOUT AT A COUNCIL WORK SESSION EARLIER, OUR ENTERPRISE RESOURCE PLANNING, A BIG FINANCE PROJECT THAT DOES ALL OF OUR ACCOUNTS PAYABLE, ACCOUNTS RECEIVABLE, AND PAYROLL PROCESSES.

LIGHT AND POWER CIP IS FOCUSED LARGELY ON THE SAME REPLACEMENT OF OUR DISTRIBUTION SYSTEM

ASSETS. SO THE BIG LINES HERE THAT WE ARE RECOMMENDING INCREASING IN THIS NEXT BUDGET

CYCLE ARE REPLACEMENT OF OUR CABLES, OUR TRANSFORMERS, AND THEN OUR METERS.

So when we talk water assets, a lot of those have a useful life of around 100 years.

And these light and power electric assets don't have nearly as long of a useful life,

usually around 40 to 45 years for cable replacement and transformers, and then even less, like 20 years for meters. And we're coming up on a period where all of those meters were really installed in the same time period,

and they're all going to be failing around the same time. So we're looking at designing the CIP to replace all the meters over the next 10 years.

SO MOVING OVER TO RATES, FIRST SHOWING OUR RATE HISTORY AS IT CAN HELP PROVIDE SOME CONTEXT OF THE STEEP INCREASES THAT WE ARE PROPOSING FOR 27 AND 28. IF WE LOOK OVER THE 10-YEAR PERIOD FROM BEFORE THE BUDGET CYCLE WE'RE IN RIGHT NOW, which is 25-26, the 2015 to 2024 period, we averaged less than a 2% increase for water and a 3.5% increase for light and power. Most of that light and power increase was the wholesale cost passed through to PRPA. Their average increase over that period was 2.5%. This has put us in a really great place for utilities affordability and our position among the front range, which we'll get into. And so we've got some room to still increase our rates and still be competitive along the front range. And the low increases in the past have put us in a place where we need some steeper increases now to keep up with some large capital projects we have coming.

If we're to compare that 10-year period to CPI, we can see we have lagged behind CPI increases, particularly on the wet funds, that wedge sort of representing a period that we did not collect revenue in those or an increase in revenue as compared to keeping up with CPI rates. those are an increase in revenue as compared to keeping up with CPI rates. ! So we'll be looking in the next budget cycle to increase to get back up towards inflation ! And no longer be deferring the asset replacement, which alLod us to keep these rates low during this period. ! So to talk about our rate proposals for each fund. We wanted to come with scenarios and articulate what a higher or Lor increase could do for our capital planning per utility. increase could do for our capital planning per utility. So in each fund, we've got a high, medium, and low rate scenario, with the medium being our recommended rates that we've built our current CIP and we'll be heading in towards budget development with. These are two-year rates, the same number in 27 and 28, since we're planning a two-year budget. with the water fund the large driver here is the halogen water supply project we'll need a minimum amount of revenue to go and bond and finance that project to complete it i do want to point out with the halogen project the water utility is still reviewing regional alternative water supply projects there may be a project that can meet our water storage goals and come at a Lor cost compared to Halligan. That being said, that decision is still to be made, and it is best we move into the 2027 budget securing the Halligan project and rates that can keep us moving forward with Halligan. So if that time were to come to pivot to a different project and one being viable, we could then change and Lor rates in 2028 as compared to presented here. So Halligan's in all these scenarios, what an increase or decrease for each rate does is put more money towards the replacements of our horizontal assets. So I want to slow walk us through what these years mean up here. If we take a water main, it typically has a useful life of around 100 years before it fails. So if we want to be targeting a 100-year replacement cycle, we would be replacing 1% of our system a year. We have 600 miles of water mains underground, so at 1% we'd be replacing around 6 miles per year. Right now, we are replacing a little over 1.5, so we're at about a 425-year replacement cycle. And we're not alone. This is common among the utility industry. A lot cities are behind on asset replacement. But if we were to increase our accelerated rates, we could PUT MORE TOWARDS WATER MAIN REPLACEMENT. IN THIS EXAMPLE HERE, WE'RE INCREASING 2% ABOVE 15 AND 27 AND ANOTHER 2% AND 28, WHICH BUILDS US ANOTHER MILE OF WATER MAIN REPLACEMENT AND DECREASING THAT REPLACEMENT CYCLE. ON THE OTHER END OF THAT, WE COULD DEFER REPLACEMENT FURTHER AND POSTPONE THE WATER QUALITY LAB, PUTTING ALL THAT PROJECT'S CASH TO HALIGAN, AND THEN WE WOULDN'T HAVE TO FINANCE AS MUCH. Under that scenario, we would still need a 14% increase to fund the Halligan project and keep up with operational inflation. So just kind of showing the magnitude of that Halligan project and what that means for our water utility. And that being said, if we were to postpone the water quality lab as an option, that facility is beyond its useful life and is requiring quite a bit of operations and maintenance costs going into it just to keep it running.

So to move over to the wastewater fund. Staff's recommended rate increase for 27 and 28 is 10%.

In these rates, we have the large projects at the Drakewater Reclamation Facility funded in every scenario with an increase in rates putting again towards that wastewater main replacement

that's going to have about the same life cycle as those water mains we talked about, about 100 years.

We know we're behind and need to start replacing those to address increased in operational costs.

And then on the other end, we could Lor water main replacement and push the lab and drop that to 8% for 27 and 28.

Moving over to the stormwater fund, the medium staff recommended proposed increase is at 5%. Again, we can increase or decrease our investment in replacing those stormwater mains, targeting that 100-year replacement cycle.

And then the other lever here is those large regional flood mitigation projects. Excuse me.

So as we talked about the Oak Street project, those are not able to be cash funded. We have to go issue revenue bonds to construct some of these large projects.

An increase in stormwater rates could really increase the cadence or frequency in which we can construct those big flood mitigation projects in our community.

and then a decrease in rates is just going to spread that out and complete less of those large flood mitigation projects over the 20 years.

Light and power. The largest rate driver here is our wholesale costs with our partners at Platte River Power Authority. The wholesale cost for the electric utility makes up about two-thirds of our budget. it. The wholesale cost increases are going up 7.5% for 27 and 28. So the two-thirds rule there means about a 5% increase would be the equivalent on our retail light and power side to just keep up with the wholesale cost alone, not increasing any other of our capital or operational.

So we're recommending a 7% increase. Here, the CIP trade-off is around addressing our backlog of of assets that need replaced. So whereas we said on the water side, we're really trying to no

longer defer replacement and add to that backlog, light and power is to the point where they want

to meet those replacement targets, but really accelerate to address all of the cable and transformers that are already beyond 45 years and are posing a reliability risk to our system. So an increase or decrease here could change that risk tolerance and clear those backlogs of of cable replacement or transformers quicker.

So what this means for our bill impacts. Here is a residential monthly bill comparison. This is average residential use comparing 2026 rates to just the first year of rate increases for 2027.

If a customer has all four city of Fort Collins utilities,

THIS WOULD BE ABOUT $18.86 INCREASE PER MONTH AND ABOUT A 9.3% BILL INCREASE AMONG ALL OF THE UTILITIES. THERE WAS A QUESTION AT COUNCIL FINANCE COMMITTEE ABOUT POTENTIALLY STAGGERING THE IMPLEMENTATION OF THESE RATE INCREASES OVER THE YEARS TO HELP THIS BILL IMPACT. And we modeled that out and found that since a lot of bills are actually driven by volumetric usage and go up so much in the summer from irrigation and air conditioning usage and electric, the bill impact from these rate changes is really felt in the summer. So if we were to push something like wastewater out for a mid-year implementation, it could actually exacerbate the feeling of that bill impact and be higher. And putting them all in January with the natural stagger of volume can actually be best for implementing these. So we have another example with an average commercial customer. Commercial customers vary widely. This may be an example of a small restaurant or coffee shop. So cumulative rate increase for this bill is about 8.7% among all four utilities. And then dollar change, $116 per month change under these rates.

Looking at our position among the front range, as we saw in our rate history, we've been able to keep rates really affordable and low. and are in a great position among the front range, the Lost being our water bills, which are what we're recommending is the highest increase. So we believe with our rate increases into 2027, this is a picture of current rates in 2026, that we'll still be in a relatively similar position that we think that the utility industry as a whole AND A LOT OF OUR PEER CITIES AMONG THE FRONT RANGE ARE ALSO SEEING THESE LARGE INCREASE FOR CAPITAL REPLACEMENT. LOOKING AT A LONG-TERM PICTURE OF OUR RATE FORECAST, THIS IS SOMETHING OUR CAPITAL PLANNING HAS REALLY HELPED US WITH. WE ARE SEEING A LARGE INCREASE PERIOD FOR THE NEXT FOUR TO FIVE YEARS, BUT I DO WANT TO POINT OUT WE ARE TRYING OUR BEST TO SMOOTH THESE RATES in that these rate increases for multiple years are needed to fund some of these large projects, with the alternative being if we look at the water fund, those 15 percent increases needing stacked up in year one to complete the Halligan project. So rather than a 45 percent increase, we can stagger those over several years. And unfortunately, it kind of places us in an obligation to keep those rates increases higher in those out years and that when we take on those debt obligations, It would be very difficult to just drop rates beyond the forecasts to meet our debt obligations.

So I want to highlight our work that we will continue around our utilities affordability assistance.

We have a reduced income qualified assistance program that knocks about 25% off of bills for those residents that qualify,

as well as one-time payment assistance program in our payment assistance fund that is income qualified

and a one-time assistance for those experiencing hardship. And then another one-time payment assistance program that was recently paused,

and we are reevaluating to make sure we've got sustainable funding and design this to carry on into the future, but that being our utilities emergency fund, which is another one-time assistance program but doesn't have the same income eligibility requirements, so we can hopefully target a larger population of our community. And then we've got outreach programs around water conservation and energy services to help Lor consumption and volumetric uses on the bills, and then we'll continue to partner with the county and state programs around energy efficiency programs.

so again tonight we're looking at guidance on those rate scenarios if we can work with those

as we develop our 27-28 budget i want to point out that utilities is aligning with the rest of

the organization knowing that we're going through a tough budget and we're going to have to be looking at reductions and optimizations with to balance our budget and instead of just increasing rates, utilities is lockstep with the rest of the organizations and bringing forward

some ideas to Lor our operating costs. An example of that being we would typically ask

for additional resources and FTE in areas that we know we need to address in utilities, but have

made a goal of it being a zero growth FTE year with our utility and that any additional resourcing we want to do in utilities is going to come from internal and repurposing vacancies.

So with that, we will pause for utilities and open it up to questions before we move to the rest of the presentation. Great. Thank you. Does council have any questions or comments? Melanie?

Thank you, Mayor, and thank you for such a comprehensive presentation. Super helpful. I have two questions. I'll ask one to the folks who are at the table first. So, Joe, you kind of spoke to this, but going back to slide 20, it sounds like we're pretty confident that we'll continue to remain competitive compared to our peer cities beyond our first increase.

Because I know right now all we can do is compare to where they are now. And even though we're looking two years ahead, are we feeling like people are having the same pressures, the same capital costs, anticipating others are going to be also raising their rates?

Yeah, we don't feel like we're alone when we talk being behind on water main replacement and wastewater main replacement. I think a lot of cities are feeling that. And then again, we don't have their board approved or adopted rate increases yet. But from talks with surrounding providers, a lot of them are looking at potential double-digit increases. And we've seen those just regionally around here, looking at some of the wastewater districts in the past and the water districts, looking at potential 10% increases. So I think ours are pretty similar.

We're in pretty good company in this tough situation. Okay.

And then my second question may be a question for Nicole. But just, this is more for just the edification. But obviously, water storage projects are incredibly expensive, and that's driving a lot of the water costs. And I've had people reach out and say, why aren't we investing more in conservation instead of storage? And so I'm just wondering if we could explain that, because when we talk about hiking rates a little bit for our consumers, it's good to know why building water storage makes sense.

Yeah, thank you, Mayor. Thank you, Council Member Patiandi. And so while we do actively support a conservation program and probably one of the best in the state, there is a limit to how much conservation can make up for things, unanticipated things like drought. And so that what storage allows us to do is be prepared for what we consider a one in 50 year drought or sometimes multi year droughts so that we can provide adequate indoor water and also for all of our businesses, make sure that they have adequate water supply for our economy, too.

so is that yeah that's helpful I think it was just eye-opening for me as you know going from a resident to a council member to learn that like conservation is wonderful but like in the situation this year we've had people urge us why don't we conserve more so that when we know it's drier next year that we've got that water but it.

Is that correct?

Yes. Yeah. So that was something that I never had thought about until I was on council, but I think it's just good to give that context when we're talking about a 200 million plus dollar storage

project that like, that's not money that we love spending and it's also really critical. So yeah, I appreciate that.

Yeah. And I, I, I think I also recognize, um, I appreciate that you have recognized that we have to have a bucket to basically put that water in and to your point if we don't then it goes down the river and we're not able to use it so hopefully

thanking us I just want a context thank you so much those are all my questions

great any other council members yeah yeah they have two clarifying questions and

then maybe if there are other council members who have questions they can ask it and then I have a couple of other thoughts and questions specifically surrounding equity. But first, the non-equity questions. I'm curious if the estimated costs, which I found so useful during the Council Finance Committee, the high, medium, and low slides, right? So those estimated costs, is that just for existing infrastructure? Or how would new development impact that? I mean, we would be committing to additional maintenance, additional miles of sewer, that sort of thing. Yeah, thanks for that question. So

when we look at those replacement cycles, we're talking existing assets. So when we add in new assets into our system that we will eventually need to replace, the build out of those we can think of collecting through development fees and kind of impact fees to build them. And then ongoing water rates from those new customers would be designed to replace those replacement in 100 years of the new growth water main. But in the meantime, that new growth is kind of contributing their ongoing rates to help us address the backlog of the replacement of our existing system. Does that help answer the question? Yeah, so I mean, the capital expansion fees pay

not only for the initial infrastructure, but then the utility rates from those companies, from those consumers are designed such that it supports that? And the reason we're behind is only because we didn't have capital expansion fees like 50 years ago? I just want to make sure that I understand.

We would be mostly behind in that our ongoing rates aren't collecting enough to replace. The capital expansion fees are really just building for the growth to install those water mains, and then the rates collect that to replace those over time. So it's mostly being behind on rates driving being behind on the water main replacement.

Okay, but new development wouldn't impact that.

No.

Okay, cool.

The payment assistance fund on, gosh, what was that?

Oh, the one-time payment assistance on slide 22. Yes. How, what is the funding source for both the payment assistance fund and then the currently

paused utilities emergency fund? So both of those are funded through donations on bills or just large customer one-time donations or are unclaimed property. So what we mean by unclaimed property would be deposits or refund checks on closed water accounts that we would normally bill out to customers. Those checks aren't delivered. Someone moves. The city's holding funds that we can't apply anywhere else those go to fund those one-time assistance programs

okay and what was the income range to qualify for the payment assistance fund

I'm gonna say 60% AMI 80% okay those were the clarifying questions that I had

and I won't launch into my whole spiel.

Okay, Julie? I'll just follow up on a couple of those and then a couple more questions. So 80% AMI is currently what?

I'm going to ask Shannon Ash, our affordability systems program editor.

I'm sure we can Google quickly. Who's got a calculator? Is IQAP 60% and then the affordability, the one-time program is 80%?

IQAP, good evening, Council. Shannon Ash. Shannon Ash, Utilities Affordability Programs Manager. IQAP is 60% of the state median income, and that's because we utilize LEAP, the Low Income Energy Assistance Program, for automatic enrollment, and that's their criteria. The Payment Assistance Fund is a partnership with Energy Outreach Colorado, and their requirement is 80% area median income. And I don't know that off the top of my head what the income amount is, but I can look that up while you're saying your next question.

Yeah, that would be great, but I think you might be the one to answer my next question, too. Shannon, we've got someone seeking out that number if you want to continue in here. Thank you. And then how, if the community wanted to donate to sign up on their bills, how do they do that?

We have an on-bill. You can donate on your bill, your monthly utility bill directly, or you can do a one-time donation through the CityGive platform online. You can send in a check. You can do that via credit card. You can even send cash if you want.

So I'm one of the dinosaurs that, well, and I'm not a dinosaur because I don't get it mailed. I use the online portal still just to remind myself how great it's going to be when we get a new one. Yes. I don't remember ever seeing anything on there about donating. Is it just something you have to ask for when you pay your bill, or am I just not looking hard enough?

It is a little, in the current system, archaic a little, there's a form you have to fill out, and it's not an automatic online process. There is a form. I'm happy to send the form, so that's just readily available, but then that gets scanned, emailed in, sent in with the dollar amount you were wanting to donate on your bill. per month and then it is going to be a much easier system in the new new cis which is what's our launch date on that

Looking at fall of this year all of this year. Okay, great. Um, thank you

Okay, then I think I'm good Shannon Thank you for the pure cities I think I know the answer to this but I want to just make sure I'm not assuming because when I think of our peer cities that we might be competing for residents,

it's more like Timnath, Windsor, Wellington, et cetera. I know that their utility stack is much different from ours. Is that why we don't, this wouldn't be comparing apples to apples or?

Since a lot of those cities have a water district supplying water and not all four utilities is why we don't include some of the towns regionally closest to us and just those main cities that have the four utilities. But if that's something we'd be interested in gathering, we could follow up.

I mean, would we find it useful?

I don't know that if we look at economic development and housing growth, if the ongoing rates or the development fee rates would make the most difference in choice. But it's something we could look at on where we're at. And I know we do with the water providers on us being generally Lor than some of those water providers for our development fee rates.

Okay. Yeah. I mean, I would say if you guys will find it useful and if you think it's good data to include, then – but I don't want to just create extra work for the sake of creating extra work.

We can. And particularly in some of the electric spaces like customers that are on REA or Excel, our light and power team has those rates as well.

so we could definitely include that. Okay, thank you. And then my last question, it's kind of, I had a bit of an aha moment when reading the packet in that, I mean, inflation

since 2016 has actually gone up like 38%. And so I don't think our rates have kept up with that at all, which is part of the reason we find ourselves where we're at. So I know on slide 18, you had

shown, you know, a 9.3% increase from 26 to 27. Do we know what the increase is from, say, 2017 to 2027 with these projected rates? Is it around 38%?

So if we go to the slide with our previous rates and look at what that may be over the 10-year period. We won't have the specific number. One more up. So the box at the bottom calls out 10-year period 15 to 24 on average. So we would have to add those up cumulatively, which doesn't seem like it would get to the 37. As we add 25 and 26, we may be closer. As we've been thinking about inflation and CPI as a proxy for our utility. I think it's almost generous to compare it to CPI rather than like a utility CPI that's probably even beyond that, as we've seen construction costs, and a lot of those go well beyond average inflation. Just to provide some additional context, we know we're well below even keeping up with the cost of replacing a transformer. So my guess would be we're below even that regular CPI of 30%.

Okay. I guess, yeah, the reason I'm asking, it just helped me swallow such large rates a little more easily, seeing that we hadn't really kept up with inflation in general.

And I don't know, it seems like a lot of things have come to the last couple of councils that we've been on that have been kicked down the road. And I kind of feel like this is another one. So thank you for a great presentation.

I can follow up real quick just on the question for area median income. So in 2026, the U.S. Department of Housing and Urban Development HUD for a four person household, the AMI at 100 percent is one hundred and thirty thousand dollars a year.

So for those people who would be. I'm sorry, one hundred and thirty. Is that what you said?

130 for a four percent household.

So 80 percent of that could be eligible if needed. If they need the help. Okay. Thank you.

Thank you. Yeah, Amy. Can I just dovetail on Council Member Pignataro's question? I'm just curious if will we continue to partner with La Familia and Housing Catalyst to help residents enter or enter the IQAP program, the alternate entry? I can't say that right. Yes. Thank you.

Yeah. And we're actually looking to expand, hopefully expand and just continue to try to remove as many barriers as possible. We've heard from La Familia specifically that they've seen a decrease in in-person attendance in all of their programming for just the continued fears in the community. And so we have not seen a lot of participation in our alternate entry with IQAP with La Familia. We have with Housing Catalyst, but there are different issues there. There and so we're trying to figure out ways that we can continue to just remove the barriers They're just there's fear around sharing any information even though we're not collecting Any other than your utilities account number any other identifying information, but there's still that fear present

I appreciate that effort a ton. So it's greatly appreciated. Thanks Other council members. Yeah, Josh thank you and thank you for this presentation it's really helpful i was interested not surprised to see the increase in water main breaks in the appendix that you provided and it seems like there's a story about one in the news um are the water main breaks this year on pace to beat what

happened last year we just looked at that data today and we are slightly behind last year and

that. I think to date through May last year, we were at like 45 main breaks and we're in the 40s, but maybe 41 main breaks. Last year's were problematic in that they were mostly under

streets, very costly main breaks. So we're not seeing the budgetary impact as much, but we're kind of on pace with the main failures. Thank you. And then it says in that chart that

the 2025 spike was dip dominated is not related to cast iron. Does that mean some of the newer stuff since we switched from cast iron who knows how long ago is also starting to break

so last year was the dip dominated so dip is ductile iron pipe um cast iron are some of our oldest mains that we haven't started seeing fail yet actually the ductile irons are the ones that

aren't even making it to their hundred year replacement before failure what we're installing

now is mostly uh pvc pipe that we're hoping hits that hundred year or even goes a little bit beyond I don't know which ones are failing this year to see that trend.

Thank you. And then what might be helpful at budget time as I waded through this is you lay out the capital needs very well. You know, what's anticipated, replacement, water storage, things like that. As I look in the budget document for the water fund and the other funds it shows a fairly substantial fund balance And so I wonder if that's a question we will get when we talk about raising these rates is you have all that money set aside Why are you doing this so if some kind of maybe two or four year forecast of the funds showing? You know whichever water storage option we're currently looking at and maybe just showing that that fund balance really needs to be set aside or will be used in addition to these rates, I think it'll be helpful because we'll probably get that question.

We can certainly provide that as we talk through these rates in the future. I'll try to paint the graphical picture with words in that we do have a high fund balance, and we are using that fund balance to draw down and fund. We do have a high fund balance and we are using that fund balance to draw down and fund our current CIP that we're putting forward while those rate increases go towards things like haligan. ! So we're drawing down on fund balance to fund our CIP which can't be done forever because it's one time funding funding that we're taking. But planning that fund balance into our rate smoothing.

Utilizing that to fund capital while the rates increase. Cool. Thank you. That'd be really helpful. And that was helpful too. So I agree with Julie. I think unfortunately the can was kicked down the road a little bit and it's totally understandable given the affordability needs of the community back. can was kicked down the road a little bit. And it's totally understandable given the affordability needs of the community back after COVID and things like that. So having a really good story to tell of why these rates are necessary, I think you've laid it out pretty well, but just making it a little bit easier graphically maybe to explain would be helpful. So thank you.

Appreciate it. I had a just similar question to Josh's about the reserves. Do we have a policy for the reserve balance and how much we want to keep in there? Caleb's saying yes.

So the utility funds reserve minimum, our policy is 25% of operating costs.

And we are well above that. The utility industry as a whole looks at what we call days cash on hand. How many days can we fund operations with our current reserves if revenues were to stop coming in? So days cash on hand is something like our bond rating agencies look at. So we set a target that's going to get a good bond rating. So we pay less interest costs on these large projects our target would be around 200 days and we are Closer to 300 400 days. So we do have a high level of reserves and are going to draw that down to that 200 day mark

I think it would be helpful enough if you're following with Josh is just When are we expecting to draw down to meet that 200 and kind of Lor those reserves? to be more within our policy. That would just be helpful to them. Great. Chris?

Yeah, I would just echo their sentiments. It would be nice to have those reserve balances, like an up-to-date reserve balance, just to look at those and see what they're at. One of my questions is, with the way we do tiering in terms of our water pricing, are there options that are not presented here that involve changing the kinds of tiers that we offer? at the water utility, like charging customers that use more and having a Lor rate for people

who are just using it for indoor use? Yeah, so the rate design on how much we charge and fixed

versus volumetric is not something we look at changing annually and would be a five to 10 year project on completely changing that structure. Not taking that long, but we don't review it

annually to change. It is something that we did just recently assess just for the water fund on comparing our fixed charges, base charges compared to the industry. And we are very aligned in that. I think it was around 50% of our revenues come in through that base charge, and then the others are

volumetric and tiered. But none of these rate scenarios have in that rate design changing what those tiers volumetrics may be.

I guess it would be helpful to me to be able to look at where our water is being used, like what kinds of water users are using the most water. I know that maybe that's not what's being discussed in this, but just as a newer member of council to understand the kind of pricing structure we have in the city. I mean,

I was just looking up online like water pricing structure and and and trying to get a sense of like

Where are we at in terms of different kinds of? Cities in terms of water budgets and other kinds of things that other communities are doing so just having a sense of like Where our water is being used?

Like is it being used by heavy water users or is it mostly industrial? Like that kind of stuff would be helpful for me just in general

and we have that information to follow up with on To provide a little bit more on that rate design, one thing we do look at and update every two to three years is the cost of service allocation among the classes.

So are we recovering the right amount of cost from residential versus commercial versus industrial?

So that data we do pull more frequently to make sure our rates among the classes are equitable and we're recovering the right costs from the higher users of rates. Right. Okay.

One of my questions, too, is about, can you just talk a little bit about the connection between the development fees that we charge and these rates?

What's the relationship between those two things, and how do they interact with each other?

So I would say they have an inverse relationship when setting our annual rates for the year. in that development fees go into our budget. And if we were to Lor development fees,

we would need to increase rates to collect the same amount of revenue. The development fees are designed to recover the cost of the burden of growth on our infrastructure. So those are like our impact fees or capacity fees. We call them plant investment fees on the water side and electric capacity fees on the electric side. So when a development comes in, we look at what their strain or impact is on the system based on their demand of water use or demand of electric use and charge them based on our overall system value so that they're kind of buying into a system. So again, if we didn't have those development fees to do the same amount of capital work and infrastructure replacement,

we would need to increase rates to pay for those if we didn't have fees.

Does that help?

Yeah, no, that's helpful. I mean, I guess part of what I'm thinking about is my question is about, I guess what I'm driving at in some ways is how our population like growth, decline or stability like baked into our assumptions about these capital needs going into the future. I guess I guess I put it this way like let's say we're investing a huge amount of money into storage for Halligan in the in the case that we're going to need drought protection in an increasingly volatile future. What are we how much growth or are we projecting in terms of the need for a project like Halligan or a water supply?

Growth on the revenue side or on our expense?

Yeah, I guess I mean in terms of like population growth, actually, or like economic growth and things like that in the city.

We model our utility fund growth based on sort of our previous growth trends and try to keep it conservative. So we're not, you know, building a budget that we won't be able to collect for in the next couple of years. So we do have modest growth assumptions in our financial planning.

And then on the expense side, our planning is through that capital improvement planning.

And what growth do we know we need?

We're going to need more assets at the water treatment plants and what our distribution system might look like.

So we're trying to do it on both the revenue and expense end. Okay.

Yeah. I might come back to that, but I guess I had a different question just for now.

And these are all just super basic questions that are really helpful for me as a new council member just to understand the basics here.

So one of the questions I had is, okay, let's say we need a 1%. These things fail after 100 years, so we need to replace 1% of them a year to stay up to date.

I noticed that even in the high scenario, it's like 285 years.

and that in the appendix, right, where last year we spent $3.5 million fixing water main breaks.

Like, how come there isn't a scenario that's like, here's what it would take to actually replace all of our water mains at the appropriate times?

Like, I guess I don't quite understand the plan.

So if we think of a mile of water replacement, maybe around $2 million, and it varies widely,

whether it's a 6-inch main or a 48-inch main under a street. So that 1% or 100-year

replacement would be 6 miles per year at $2 million a mile. We would need to be funding $12 million in water main replacement a year. I think right now we're around three and a

half million. What that would be is around a 20% increase on top of those 15% water rates to get us

up to that replacement cycle. And we would have to look internally and say, do we have the

the engineers and crews on staff to eat to be able to do that in year one probably not it would take

some a while getting there um so it's something we hope to phase in over time we don't really expect to be hitting that industry target year one but no this is something over the next 20 years as those main break costs become you know three million dollar plus a year something will it would be efficient to chip away at effective and council member conway if i can also just add

cost element, but there's also, I'll say, just a feasibility from a community impact perspective of how many miles of streets we could have dug up at any one time to be doing all of these projects. So we also, because we know how much everyone loves when we have all of that happening. So there's, I think, also a reality filter that we brought to it of what we thought would be practical in the scenarios that came forward. And I do appreciate the question, because you're right, When you look at the number, it still looks like we're continuing to be behind, which at some level we are.

Okay. And do we think that that higher number for water main fixes last year is set to continue to be elevated, or is that a one-year bump?

Or is it because we're behind on deferred maintenance that we're facing higher fixing costs?

We're hoping it was higher than normal. We are seeing the trend go up.

And as we just think, if we're not replacing them, they're just going to continue to age.

We're going to get more that hit that 100-year mark, and likely those costs are going to continue to rise.

And hopefully last year was somewhat of, not an anomaly, but a higher than typical year. Okay.

Yeah. Yeah, actually, we are seeing an inversely proportional rise in breaks as compared to main replacement. It's consistent. So that is why we would like to see more main replacement and fewer breaks over time. But again, as Joe noted, the cost is significant. So we are looking for other alternatives to help either bring in revenues, additional revenues to help offset those costs or to Lor our overall capital costs so that maybe we can focus more on the mains.

So Lor the capital costs, meaning like find savings in the capital plan? In other areas.

Yes. Not like get more efficient at replacing water mains or something like that.

I think we're about as efficient as we're going to get. Okay. Yeah.

All right. Yeah. It's just so striking looking at the thing. Like, okay, we need a 1% replacement rate.

And then it's like way off, right? It'll be like we replaced it at a 0.22 rate. Maybe that was wastewater, I think.

But regardless, just from like a naive person's point of view, it's like something's not adding up here. But I guess I understand what you guys are saying. But I still don't quite understand the long-term plan.

I would like to say that we are very much focused on main replacement or pipe replacement in general. We just finished our 20-year CIP and are looking for those savings where maybe we could also reduce the cost of some of our projects and therefore increase the rate of replacement in other areas, whether it's water or sewer. And we will also have to work with our partners in streets because, as Kelly alluded to, that will also impact some of the paving budget for the city. so it it is something that we are working on we are focused on it we are concerned um but it's going to take us a little bit of time to figure out how to raise that rate to reduce um the overall number of breaks that that that increase in um breaks we want to we definitely want to reduce

that. So that's our goal. Okay. Yeah. Is that something you can like borrow to like borrow money to pay for in certain ways, right? Because you're like borrowing upfront to save on a, on a flow of payments going forward. Like if we saw that it was next year, it was three and a half or five or more, you know, we could maybe borrow to speed that up in some way or what would,

yeah, we could look at, um, issuing revenue bonds and debt financing our, uh, water main replacement program. Unfortunately, the amount of debt we're going to take on for like the Halligan project and our wastewater treatment plant project, we are capped at how much debt the utility can take on and we're going to be maxing that out, so to speak, with the next couple of years. But down the road, if we have more debt capacity, we could be speeding up maintenance replacement through

bet. Okay. I think those are all my questions. I'll just say it does seem like looking back at

the last 10 years of going under inflation and then the ask to go so high over inflation at this point, it's just surprising to me given that I think we've known about Halligan for so many years that the rates weren't set at a higher rate to pay for those costs earlier.

To me, I guess it just speaks of mistakes in the past in some ways that I don't know if the people in this room are here. Probably not, it looks like.

But, yeah, it is surprising that we need to almost double.

you guys is presenting this and all the effort on the utilities equity side and yeah excited to learn more about the whole process I have I will add that you

know when Halligan began 18 years ago the price estimate was very different than our current price estimate so it's not that we thought it was gonna be over $250 million to build Halligan. And then also, we didn't have this plan in place until, you know, Nicole and Joe came on. So like them setting up this replacement plan to actually understand is super helpful. As somebody who was on council, especially during the years of COVID, when we didn't adopt rate increases, we knew that we would have to do higher rate increases in the future. But there was no plan that outlined what that was going to go to and what funds we needed. So I'll just say that this is a huge improvement to really help because raising utility rates is never fun.

And it's really difficult when you're not pointing to why. And so this is just really helpful and I think really future forward looking.

I think, you know, it's a little difficult to wrap your brain around 425 years of replacement because, I mean, it's actually like infinity. We're just like going to have to keep on replacing them. So what does like 425 years actually mean?

and what is that versus if we were on track, I can understand Chris's question. Like those two things are kind of difficult to comprehend. I mean, because I still am like 425 years is like, who knows what's going to be happening, you know?

So I do want to just say that this is really easy to understand and justify. And it's not ideal to raise rates, but we did intentionally not raise that during COVID for a few years,

knowing that we would have larger increases and now knowing what we're paying for is super helpful. So thank you.

I just have one more thing to add to.

I guess as part of the Ad Hoc Committee on Affordable and Sustainable Growth,

I'm interested in seeing work looking at water development fees in particular going forward

and thinking through that as it relates to water rates,

especially going forward in the way we charge them.

Just because it doesn't, it's always confusing to me that the,

what is it called? Let me look this up real quick.

It's always confusing to me that the cost of the customer utility rates don't factor in the price of water.

increasing over time, but the development fees do in a certain way,

like the market price of water at any given moment.

And it always strikes me in terms of the raising of the development fees

that the reward that Fort Collins gets for having this amazingly valuable water portfolio

is like really expensive development service fees.

and so thinking through that in the ad hoc committee as well would be helpful for me. But that's not germane to this exact topic, so I'll just thank you guys and move on.

Great. Anne? Yes. Thank you so much. Again, as I mentioned, I got to see quite a bit of the Council Finance Committee, and it's nice to see it two times in a row,

to really have it gel in my brain to some level. I absolutely support the proposed rate increases. Again, nobody in the room was part of a lot of those decisions,

and the capital planning work that staff has done is just exemplary. I'm really, really impressed by it, and the shift to the long-range capital improvement plan planning,

or modeling, rather, and the systematic asset management.

I just think that that's what sound infrastructure stewardship looks like. And that's, I think, the nerdiest thing that's going to come out of my mouth tonight. So these increases are necessary, right? They just are. And I think we will still remain competitive regionally as your slideshow. So that feels good. The balance of my comments, though, I think are focused on how we raise rates equitably and not whether we should or not. So the first thing that I've been thinking about quite a bit is at what income level should we expect payment at all, right? I mean, we currently compare pretty well to national benchmarks. I think the slide showed about 1.8% of income for households for water and wastewater,

which is, I think, the national average or the threshold that's the goal is 4.5%. Is that right?

Okay. So that's a credit to how the utility has been managed. And, you know, some things to do with how low rates have been, but those are the current rates. And I think with the, what, 7% annual electrical increases and 15% water increases, that favorable gap narrows.

So that benchmark tells us when utilities become a burden, but it doesn't really inform us about if we should expect the Lost income households to pay at all.

And that's the values question that I would be interested in raising to the rest of council.

And I guess the first question for staff, and this isn't like a tonight thing, but could you model the combined bill impact? So water, wastewater, electric at like 20, 40, 60 percent AMI after both years of proposed increases, just so that we can see what that looks like as a percentage of household income and how that impacts those with less resources in our community. Because I think that might help us make that values based decision about where the floor should be before we reach that crisis. with the increased rates.

Secondly, we talked a little bit about the consumption-based tiered rates, which I think is a good conservation tool, right?

The more you use, the more you pay for,

but that's not an equity tool. So income-based tiering could set the rate itself based on what a household could afford, not just how much they consume, which would be a fundamentally different tool. but I don't know personally if we have the tools to do both the consumption and the income-based tiering so I suppose the question would be if we have the legal authority or the administrative infrastructure to layer some sort of income-based rate tier onto our existing consumption structure

if you know the answer to that it would be something we'd need to evaluate with a city attorney's office when you get it among customer charges per class there are some regulations and rules we would need to follow but it's certainly something we

could look at it would be interesting to know first if we can do it and then what the cost to implement or what sort of models exist I think it's worth noting it I believe leap is a federal program right or okay so I mean our current IQ QAP discount, the 25 percent discount is built on the assumption that LEAP would cover about half the subsidy cost, but things at the federal level are pretty unstable right now. Unstable? Instable. And if those funds are cut or eliminated at the federal level, which I really think is a decent possibility, then that structure collapses overnight. So I feel like we should also be planning for that scenario and not reacting to it after the fact. So I'm curious what it would cost the city to fully fund IQAP without LEAP. And is there some sort of reserve mechanism or dedicated budget line that we could use as a backstop?

So I think I have those numbers. So our 25% discount for IQAP is around $500,000 to $600,000 in revenue that we don't bring in because it's a discount on a bill. So if that were to double and kind of cover that LEAP portion, that would be another $500,000 to $600,000 among the utilities. That would then not come in as revenue, and rates would probably need increased to make up for that. Does that, I mean. For what that would mean for a rate would probably be less than a half a percent among the four utilities.

That to me seems like a valuable thing to consider. Again, just looking at making our community resilient and living the values that I think most of us have, which is caring for the entirety of our community.

The other thing that I would note with that in terms of contingency planning around potentially losing federal funds is so the earlier conversation about the reserve positions that we're currently in with the utility funds, we would likely have time and resources to be able to react and not have to do something proactively planning for that contingency.

Okay. That's good. It just everything feels so chaotic that I feel like it could disappear any day.

The other thing that I've been thinking about quite a bit is how IQAP is only available to customers who pay utilities directly. Is that right? Hi. Hi. Good. You knew that I would need your help. So I feel like there are a significant share of low-income renters in our community that live in units where the landlords cover utilities and then fold the cost into the rent. So those tenants don't qualify for IQAP. Correct. And I feel like they would still absolutely feel the rate increases as their landlords pass that along. So just higher operating costs. So that feels like a structural gap in the program. So I'm curious what tools we have or could develop to reach the tenants whose utility costs are embedded in their rent instead of separated from that. And if there are models that other cities have that we could look at.

I'm not sure if other cities have a structure similar to IQAP. I think the biggest thing that we run into is when a customer's utility account isn't in their name, it's just it's hard for us to match anything. And so we have a lot of property management companies. You just search the account number and it's 100 entries and it's just unit one, two, three, four. The way around that is if the tenant calls in and asks to have their name put on as either a co-applicant or just listed on the account, then we can put them on IQAP. We can find them. There's just no way for us, like I'm doing that currently, like going through each line that we haven't been able to match to see if I can find their name somewhere in our system so that we can apply the IQAP rate to their account.

And so it's a very manual process that, again, I'm hoping that our new system will be able to help with. But right now, there just isn't a way with our current system to do that easily.

And I also wanted to speak to the LEAP, the federal program, real quick.

every year the LIHEAP, which is the federal program, the low-income energy assistance program at the federal level, is not part of the president's budget. It is cut every year in this current administration and in this current administration's first term. It was never in the budget. It is a bipartisan supported program, and so it always finds its way back in. And in this last year, they actually increased the funding for it. And so there's always this back and forth of is it going to be funded, is it not, which is obviously a very unsettling time for states and for people who obviously rely on that assistance. But it has been funded every year, and obviously we can't predict the future to know if that will continue to be the case. but it has been, I think, because it is bipartisan supported.

Thank you for that reassurance. It's very easy to become frantic. I've been there. I'm sure you understand and live that.

And we have done a lot of contingency planning because we rely on LEAP for auto-enroll. If LEAP were to go away, we would be able to implement just our own internal program to at least have that side of it. So the greatest benefit is when somebody gets LEAP and IQAP together. But if LEAP isn't available, we at least still want to provide the IQAP assistance.

Back to that sort of limitation with the landlords and the sort of master meter situations. I mean, I feel like there are income qualified properties in our community, right?

I can think of multiple, like all of the villages portfolio, for example. But not all of those would, I mean, even though many of those are capped at like 60% AMI, some of them wouldn't qualify for our own programs, right?

Well, yeah, and they could. That's one of the things that I've talked with Joe and Randy, our rates analyst, to see if we can implement a way, and this is just very preliminary exploration, exploration, if we can just do a blanket IQAP rate at income qualified properties. So housing catalyst properties, would it make sense for us? Is it possible on the administrative end, on the utilities rates end, on the IT billing end, to just apply the IQAP discount to those? to just apply the IQAP discount to those properties where we know they are income qualified they have to be income qualified to live there. ! And again, that would hopefully be removing a barrier as well.

! I would strongly support continued work in that area. ! Personally, I would be a lot of the income. ! I would strongly support the income. ! I would strongly support the income. ! I would strongly support continued work in that area. Just a couple more questions. You mentioned that the Payment Assistance Fund and the Utilities Emergency Fund were both payment assistance fund and the utilities emergency fund were both that was all donation based right is there any sort of structure where i was looking at house bill 21 1105 which doesn't apply to us but i think it's the investor owned utilities in the state where there's a surcharge on the bill And then all of that funds Energy Outreach Colorado for low-income bill assistance. Is there anything beyond donations, essentially? Which, again, we're grateful to.

Sorry.

Sorry. A current topic we're evaluating, right? Okay. What can we do to get more funding into that program and a sustainable funding source to stand it up? So something we're evaluating and looking at. But with that, those donations do go to match to get Energy Outreach Colorado funds in there. So trying to leverage it in that regard, but nothing else where.

Again, I'm just trying to balance the absolute need to protect some of the most basic resources that our community has. I mean, water, light, power, these are really important, critical things to everyone's health, but recognizing that being able to afford them is sometimes really not doable for many families in our community. And again, focusing primarily on people below 100% AMI, but I'm curious if you apply that like 4.5% of income, where do you land after these rate increases go?

And what income does one need to make to get there? And we talk about missing middle housing and sort of missing middle utilities as well. Making sure that, again, I think there are plenty of people in our community that can and are happy to afford it and invest in our utilities infrastructure. But I do not want to punish those who can't.

All right. So, yeah, I think the only other question is around solar equity, which I think kind of came up as I was researching all of this.

And I don't know how applicable this is, but I would be curious as we're pushing towards electrification and solar especially.

I mean, higher income households often install rooftop solar.

And does that have an impact then on like the greater utility rates for everyone?

Yeah, I suppose in the sense that rooftop solar may offset your solar costs and less revenue would be going into the system and potentially put rate burden elsewhere. where I'll have to circle back on if any of our incentive programs to help with solar incentives or support for that, or income qualified or, you know, reaching those populations that could benefit from solar as well.

Okay. Just I'm trying to be as comprehensive as possible in this process. So again, then the other thing that I've noticed about some of the housing, the income qualified housing properties specifically, are that some of them are master metered apartments. They do have solar. How are those credits, like, I guess the biggest question, what are the billing differences between master metered apartments and individually metered ones? Like, is there a commercial versus residential rate?

So you're talking solar on IF.

Mostly solar. I mean, I guess it would be a larger question, right? Like, are people who are living in apartments with a master meter paying more or less than people who have individual meters?

at first glance it would seem no they're paying the same energy consumption charge same aggregated demand charge um but we could put some thought into if there is a difference on if a if a individually metered is paying more or less most of our multifamily properties do have an individual meter on those um but we would need to follow up on that one put some thought

Okay, that's fine. And so then it would also come into play with solar and if you see more benefit to a community that has solar and then if they're individually metered versus master metered and what that impact is. I know that is a specific issue for some topics.

Our services teams will be all over this. So we'll bring that question back.

Good, good. I would love to have a long, nerdy conversation about all of that. But again, I'm focused on making this fair and making it equitable. So if that didn't come through in the questions, I didn't do my job.

One of the biggest areas that we see with the master meter, water meter issues in mobile home parks. And so that is an area where our mobile home park customers are not able to get the IQAP rate on water, which is a significant issue. And so that's been an ongoing problem that's really hard to solve because it's also a very expensive problem to go from a master meter to individual meters. I mean, our mobile home park owners don't necessarily want to take on that cost. And so that's trying to figure out, again, how can we provide some benefit kind of overall to the entire park when those customers are not part of they're not on the account holder so we can't apply the rate directly to the customer but is there something that we

could do across the board thank you so great thank you so much for all of your

time and and really detailed answers thank you any other questions all right Seeing none, I think we can proceed.

All right. Well, we'll proceed to the second part of our presentation. And I do just want to thank Joe and the entire utilities team for doing a lot of great work. I will note, as in 2028, we really worked towards having a citywide capital improvement program. We're going to be taking a lot of the great lessons learned from the work that utilities has done to apply that citywide. So we're very excited about that. And I will turn it over to Jen who's going to walk us through a number of things related to our revenue outlook in the governmental funds

All right. Well, thank you Caleb and good evening council

There you go, and so as Caleb said transitioning to the governmental side here

so for governmental revenue this chart here shows in 2025 a pie chart of

Governmental revenue and sales and use tax is about 50% of our governmental revenue

It's also generally considered the most flexible revenue for the delivery of city services

I Wanted to talk a little bit about the difference between sales and use tax So sales tax is collected and remitted by the retailer at the point of sale when you make your purchase when you buy your

Your t-shirt or your food it's on the purchase price And then those funds are held in trust by the business by the retailer and then they're remitted back to the city based on That business is assigned filing frequency Whereas use tax on the other side is remitted by the consumer typically a business and that's when the tax was

legally imposed but it wasn't collected at that time of purchase and

Use tax really is a complement to sales tax. So you pay one or the other, but you don't pay both And sales tax and use tax the rate is four point three five percent And we do also tax groceries that at a Lor rate at two point two five percent

All right, sorry

Go in the wrong direction and I do have a couple of examples so some common sales tax scenarios so the first one is retail purchases and so that's when that sales tax as I mentioned on the previous slide is collected based on the purchase price that's charged at checkout when you buy an item the second example here is on delivery charges so delivery charges are subject to sales tax and they are they do apply on a taxable sale so for example if furniture was delivered into into city limits that delivery charge would become part of the purchase price and then sales tax would be collected on that total purchase price which would be include that delivery charge and the third example here is service fees or additional fees those a business can charge those they then become part of the purchase price a common one you may see out there is at a restaurant they may charge for example a kitchen fee that kitchen fee does then become part of the purchase and is subject to city sales tax and then have a couple of common use tax scenarios so the first one is motor vehicle sales so with motor vehicle sales tax is often not paid at the time of purchase but it's due upon registration at the county another example is building permit use tax or building permits and that is collecting the tax upfront as the deposit kind of guarantees that the city does capture that revenue it's part of the building permit process on construction materials and then a third example here is just other purchases so that's due when that local sales tax was not collected by by a vendor for items that were delivered or used in the city and then that business would then remit that as use tax to the city and the next slide here this shows northern Colorado full stack

sales tax rates so in the gray there that's the state rate the county is in the light blue and the city is in the orange color and you can see that fort collins has one of the

higher full stack tax rates in northern colorado at eight point three um eight point three percent i did want to note here that those cities with the asterisks on them they're in more than one county so for example greely is in weld county weld county does not have a sales tax so depending on where that city is located the full stack could be could be Lor

and council has seen this slide before this is the city's are the chart it shows taxable sales in the city of fort collins over time it's been updated through 2025 for the full year what you can see here in the

the orange line is the city's percentage or the city's population out of the county and that's remained relatively stable over time at about 50 percent but what has really changed is the city's percent of the county's taxable sales which was up in the 70 percent has kind of hovered down and kind of been in quote getting close to 50 percent so in 2024 and 2025 it was 52 percent of the county's taxable sales wanted to then share where we're at year to date with sales and use tax results so budget to actual were above budget for both sales and use tax

combined or over budget by five point six million dollars I did want to point

out here that without January January accounts are about half of that overage would be two point three percent or two point three million dollars over budget the region what the reason why I mentioned this is that January revenue

does predominantly reflect economic activity that occurred in December and so that revenue would be accrued back to the 2025 fiscal year. 2026 has also started out as 2025 was very strong with audits, voluntary disclosure agreements, and building permit use tax. And year-to-date sales and use tax collections are up 3.4% compared to 2025.

We are starting to see some softening across many of our sales tax categories, except for those that are majority online retailers. I would also mention that we had a very strong month in January February was a bit weaker March was strong and then April was tracking very very close to budget so just it hasn't been very consistent for the trends that we're seeing so far so far to date this year wanted to then share what other cities across the front range are seeing as far as sales tax growth so on the far right You can see the 2026 year to date sales tax growth This is through April or the most recent data that the city had available It's sorted from the largest percent change to the smallest percent change and then the column there in the middle is

2025 percent sales tax growth compared to the whole year compared to 2024 you can see the city of Fort Collins there

At 3.7 percent for last year and then so far year to date 4.9 percent growth really seeing that

most of these cities are seeing positive growth in 2026 so far I did want to highlight one thing here which is that in 2024 sales tax did come

but we came in at 3.7%.

So that did mean that in 2025 for sales tax, we came in under budget by about $2.8 million,

but we did have a very strong year for use tax in 2025.

So combined, we were over budget by 1%.

And that brings us to the current sales tax forecast, what we're looking at right now. We're looking at 2% growth for 2027 and 2% growth for 2028. As I mentioned earlier, just seeing some softening across some of our sales tax categories,

except for those that are majority online retailers.

As Caleb highlighted earlier in the presentation at the beginning,

just a very uncertain economic outlook and decrease in economic sentiment.

And then also just being a little bit more conservative at this time, just because, as I mentioned, we aren't really seeing a consistent trend so far,

As we had strong growth in January week growth in February strong in March and then tracking very close to budget in in April

So for use tax looking at 8% growth in 2027 and then 2% growth in 2028 looking at this forecast is really based on inflation from our 2024 actual so if we applied inflation from 2024 four figures actuals through to 2027 it would get us to eight percent growth and that's because we had a big spike last year in 2025 up about 17 percent and so that's where you see that eight

percent because we didn't want to it was a very high year a strong year last year and then car

tax was down last year about 2.5 percent and then flat so far in 2026 car tax is about a third of

the city's use tax collections and then we have building permit use tax accounting for the other third and then return tax which is other use tax and like audit revenue and that kind of thing except the other third and use tax is volatile it's difficult to forecast and it's driven often by development and business activity so we do check in with of course our economic health and planning and planning teams just to check in on these forecasts too as we go through the

the forecasting process and then we wanted to share a couple of scenarios so the sales and use tax forecast the current forecast that we're looking at are the baseline forecast and again that's 2% growth in 2027 for sales tax and then 2% also in 2028 and then for use tax 8% growth in 2027 and 2% growth in 2028 however if some of these positive trends that we are seeing do Continue then we would be looking at a possible optimistic forecast and that one the use tax Forecast stays the same but what does change is the sales tax forecast goes from 2% to 3% in both 2027 in 2028 and that's something that we would just want more months

To have some more data points before it would be we would feel comfortable with the optimistic forecast that's down below

and then the last couple slides here are on property tax so for property tax in that pie

chart if you can remember that I showed at the very beginning property tax is about 10% of the

city's governmental revenue however about two-thirds of that does go to the putter fire

authority through an intergovernmental agreement the city's no no levy or has not changed since 1992 and then also this chart on the far right shows what a city property owner

would pay in 2026 based on a 2025 assessment and the city's the city

portion of the property tax of a resident in Fort Collins would be ten

point five percent but you can see that the county the school district and the library do library district to receive the majority of that property tax bill I

I did also want to highlight here that Fort Collins is a home rule city so it is shielded from the state's new revenue caps

But it's still impacted by assessment rate reductions and so that brings us to

The property tax forecast which for 2027 is 4% and for 2028 is flat or 0% this is based on

preliminary 2026 valuations and conversations with the Larimer County assessor's office and really recommending actually flat growth in both 27 and 28 however we budgeted 34.1 million dollars for 2026 that was before we had the final assessment certificate evaluation

in november of of 2025 and that did come in forecasting to bring in 1.4 million dollars

more than budgeted so that's why there's a four percent increase in 2027 and then flat in 2028 and then just wanted to mention on here too again just that put a fire authority does receive two-thirds of the city's portion of that property tax and so you can see the breakdown of the city's portion and PFA's portion in 27 and 28 and with that I think we've got a couple slides Victoria handed over to

thank you Jen good evening as we talk about the revenue side of the budget equation. As Jen noted at the beginning of her section, taxes are not the full piece of our governmental revenues. So this table shows some of the other revenue sources and just the general fund. General fund being kind of often our most fungible funding source as we think about our overall budget. So you can see there are a number of other not as significant but still very important revenue lines and there's not really a clear or consistent trend across all of these other categories. There's a lot of different behaviors and manifestations of different changes and economic trends that are being reflected here. So for instance, in intergovernmental revenues, that's going to be any revenues that we receive from other governments. Also, that includes our payment in lieu of taxes from our utilities. We are seeing increase in that payment in lieu of taxes, but we are seeing like a decline from the state, such as in the state, marijuana revenue share back which is declined by 50% versus what we had seen. So a lot of other varying trends which I'm happy to get into if there are any specific questions but maybe a simple way to kind of summarize this table is to say that as we are engaging in this budget work we're really turning over every stone and looking at a lot of assumptions that potentially haven't been refreshed in a while. So we really are refining our estimates in our outlook as we look ahead in how to match things up with our expenses.

As we discussed in the council onboarding financial outlook, we were anticipating a shortfall this budget cycle for 2027-2028.

That was similar in magnitude to what was closed in the 2026 revision process.

So that was $15.5 million. We are still looking at that same range as we refine our estimates for both revenue and expenses.

That estimate would be with the baseline forecast. There would be a little bit of relief if we were looking at the optimistic range. But in either case, we really are looking at a budget where we need to realign our costs and our service levels with our ongoing financial capacity.

It's not really going to be eliminated with any varying revenue projections that we might see.

the expense pressure that we have seen since communicating that first gap is our compensation team has done a robust study in market analysis and we are seeing recommendations for a little

bit higher range for salary increases than we had included at that time so that's some of that increase that you see versus the 15 million dollar in that range so as we look towards this budget

cycle. The good news is the gap isn't worse than we thought. And the bad news is it still is a gap that we have to solve with reductions. So staff since last fall has been working on proposals for how we can contain costs. And we are looking at about $20 million of reduction proposals right now. So that's what we're working through and evaluating as we compile our recommended budget. We're looking at these different scenarios, trade-offs, impacts, and a couple of the early emerging themes that we do see from reduction proposals are listed here. First one is probably our low-hanging fruit, which is to make sure everybody is paying their fair share when we look at dedicated cost services or partnerships. We're also looking at any efficiency opportunities for how we can deliver the work, similar to what Joe described that the utilities has been evaluating, and particularly looking at vacant positions to see is this deployed to the highest needed use and then finally I'm looking at the actual impacts to service levels and the trade-offs that would be required to finish closing that gap a little bit about budget engagement so budget engagement is not a standalone phase or outreach effort it is embedded within a lot of our existing engagement processes and that is to say that the budget is how we're operationalizing a lot of our plans and a lot of our priorities. So anytime we are in doing engagement, when we are gathering feedback on those plans, that is input that we're able to evaluate as we look towards compiling the recommended budget. Additionally, the community survey, which I believe is circulating now, does ask the community about if they would like to see more, the same, or less investment in each of our outcome areas so that also gives us feedback in a way that's representative of the community normally under our prior budget process this is when we would have published all of the proposals we were evaluating for our budget we have not published all of the current proposals primarily because when you're looking at 20 million dollars of reductions some of them could be more sensitive or or something that we would need evaluated in more robust context so So we are not publishing those at this time. Instead we are working through that existing engagement feedback as we work towards our recommendations and then once the recommended budget is published in September, that's when kind of that more targeted budget engagement phase begins. So that will include an interactive R-City page where you can fill out like a quick poll or subscribe to updates. We'll be visiting the Super Issues Board again and there are public hearings that are scheduled as well. how that fits into the overall timeline here you see kind of different phases or different bodies that we've been visiting with as we work through the budget process so typically the first full work session with the council on the budget actually wouldn't occur until late june so we've been doing a lot of pre-work understanding that we have this gap to work through we've been peppering the Council Finance Committee with a lot of presentations by each service area about their specific trends and outlook. We visited with some boards, some other community groups that have invited us in, and we're talking about this revenue side of the picture in today's work session. For the July 14th work session, that's where we're going to marry things up and talk about the expense side a little bit more in detail ahead of finalizing our budget recommendations to publish in September as we kick off that other engagement process so we've actually done quite a bit of this conversation earlier in the process than we typically would have and that's because we know when we are looking at a reduction budget these can be hard conversations that we want to really understand and dive into a different level of detail for and with that we'll turn it back to you for your questions great thank you so much does

council have any questions or comments

Melanie I don't have questions because I think your presentation was very complete and very clear

just thank you for all the hard work and I'm just looking forward to seeing how things roll out in July

September October November I think we're going to have some good discussions and thanks for setting the foundation with this discussion

Amy Thank you. In the property tax portion of the 4%, is there a breakdown of how much is commercial versus residential projections?

There is, but I don't have that, but we could follow back up with that.

Thank you.

Other questions, comments? Chris?

Yeah, on slide 51, it talks through city revenue, and it shows a decrease from 2025 to 2026.

but then when we were talking about sales tax and things like that, it all seemed like it was increasing at a decent rate.

What is the drop in 2026 and then still not recovering to 2025 levels until maybe 2028?

So thank you for the question and for going through the appendix slides as well. So we do, as Caleb mentioned at the beginning of the presentation, trying to balance some conservatism. in with not wanting to create a bigger gap to solve through this process. 2025, part of the reason that you see that higher than what was budgeted for 2026 is we did have higher audit revenues. We had higher one-time revenues that aren't something that are stable enough to include in our baseline projections. So we're actually forecasting off a Lor baseline than what you see in the 2025 number. In addition, there will be supplemental revenues that aren't known at the time of forecast. that'll be appropriated throughout the year that end up in the kind of final year-end budget that we don't include in our original budget projections. So you can think, for example, of insurance damages. So these are things that we won't be able to know, we won't be able to predict, and we'll collect them throughout the year, and then they need to be appropriated for us to use them, but they also come with an associated expense. So as we clean up things and take those supplemental appropriations throughout the year, that can also increase the budget versus the number that we're originally budgeting from.

So, yeah, what Victoria said, I guess just to provide a little bit of my lens on this as well, this is pretty common that actual revenues are going to come in higher than what you budget. A lot of that variance is due to unanticipated grant revenue.

2025 in the utility funds, for example, there was the settlement from Open International that was over $20 million in revenue. So together, it's a whole number of different things like that where from the budgetary standpoint, we're really looking at our ongoing base revenues that we know we can confidently project at this point.

Okay, thanks. That helps. Caleb, I just had one more question, too. Do you remember in our first session where we looked at the budget right at the beginning of the year, I asked you, it seemed like the reserve, the general reserve balance had been on a decline since COVID. And you had kind of said like, well, I think that those were due to a series of one-off factors and was not like a structural issue. Is that still your sense that there's not a structural shortfall? Or do you have a sense that there's something?

So I want to make sure I'm understanding the question correctly. If I'm recalling back to that conversation, it was in the context of what the actual fund balance is that the city was seeing at the end of each fiscal year. And there is kind of a little bit of a Goldilocks principle in terms of financial management that you want to plan your fund balances in a conservative way that we are not overcharging fees we're setting or we're not overcollecting taxes that then we have no public purpose for. so there is a lot of work that goes in budget planning trying to get pretty accurate in terms of how we're budgeting so we're actually expending the money that comes in. I will say confidently the city is in a good financial position. All of our various funds are within council adopted reserve policies right now and the structural issue that we're facing in the governmental funds is a prospective one. We see it coming in the next year. Certainly on the staff side, we're committed to it actually not materializing because we are recommending budget actions

to correct that. MR. Okay. I think that answers the question. I think that's it for me. Thank you, guys. Other? Josh? Thank you.

Will the, they're talking about raising interest rates now due to energy costs and inflation and things like that.

Will that, do you think, have much of an impact on use tax, especially as we go throughout the summer?

It's certainly a possibility that we could see that. I think noteworthy in the trends for year-to-date that Jen discussed. the majority of that was before we saw a lot of this escalation and pressure on energy costs. So yes, as cost of goods rise, we would see increases in the revenue collected as well. And we're not exempt from most of those expense pressures either. So it's a little bit of a

balancing act. It's certainly the other concern we have too in general with inflation. While some of our revenue sources can benefit from it if consumers have less money in their pocket to, you know, spend on optional items that can have a negative impact on our revenue as well. So, yeah, there's just a lot of different swirling factors that we're trying to work through right

now. Should be some interesting updates, I think, in July. And then I'm a bit concerned about the assumption that property tax revenue will stay the same, basically. The commercial assessment rates are dropping. It's a non-reassessment year. So I'm just curious if the information you heard from the assessor is that actual values are flat or if assessed values are actually flat, because those are two different things. And so I'm just wondering if you can expand on that.

And I'm happy to follow up too, because those are just some more preliminary conversations. And I guess I would just say I'm happy to follow back up, because I believe I talked with Bob Overbeck in early March. So, yeah, I'm happy to follow back up on that and make sure.

Thank you.

Great. Other questions, comments? I'll just add my comments that thank you for the work and setting the tone for what's to come in the budget and engagement and all of that. I know that this has been a lot of work, so I appreciate for both presentations, the information provided. So, thank you. All right. With that, we will take a break and come back at

Welcome back Fort Collins and we are on to our second item and I'll turn it over to the city manager. All right, thank you. We are happy to be here tonight talking about the Front Range passenger rail and joint service. I'm going to introduce Karen Champagne, who is our Director of Planning, Development and Transportation, to kick us off and to introduce our guest.

Thank you, Kelly. With me here is Sal Pace, who's the general manager for the Front Range Passenger Rail District. Also with me is Seth Lorson, who is on city staff, and he's the project manager for the station planning process, if there's questions there. Grant Bennett is also here representing the district. And we also have Joan Lyons, a representative from CDOT, if there's questions for CDOT as well. So hopefully we have a good team for you tonight to answer questions. Ultimately, what we're hoping to do tonight is two parts. One is to provide you an update on where the work stands with the district. And also, the district is requesting a resolution of support for the initial stationary planning narrative that will be part of their package going forward to seek approval for a ballot initiative. Of course, the resolution will be this evening, but we're seeking feedback on the resolution. We would bring that to you in mid-June. and then we're happy to also answer any questions tonight that you may have about the station planning process or any other station just any other questions in general around the rail district work the final update I'll share before really handing it off to to Sal to get into a lot of the details is just to kind of share that the city has been involved for a while helping to

inform the work that the district has been doing to identify station locations and to determine alternatives and pros and cons. They've been a wonderful partner working with CDOT as well.

And we are also just kicking, we just recently kicked off our station planning process so that we can have our own locally led conversation with stakeholders near the station to provide feedback and find ways for us to optimize the investment, not only in the short term, but certainly, of course, in the long term.

And what we have concluded, we are at a stage in the process where we have clarity that the station location is designated at what we've been referring to as the Drake location. But it's on the BNSF line, north of Drake Road, west of College. And we'll have a visual here to tell you.

But we want to be clear because that's sort of a new piece as the conversation and work has been evolving. So from here, I will hand it over to Sal.

And actually, I'm sorry, we'll just advance to the next slide so we can tee up the official questions for you all this evening.

So what we're here to ask is for your support in bringing the resolution forward and, of course, any feedback that you would have on the draft resolution.

And then, as I said, any other questions you might have about the rail service. All right, now I will hand it over to Sal. Thank you so much for being here.

Thank you, Karen. And it's a pleasure to be here this evening. My name is Sal Pace.

I'm the general manager of the Front Range Passenger Rail District. Karen mentioned a couple folks in the audience.

We have Joan Lyons, who I think will come up and join me perhaps in some of the tactical questions. She is the director of stations for rail station planning for CDOT. Grant Bennett, who is our station area planner at the Front Range Passenger Rail District.

Not joining us at the table, but also in the audience, James Flattam, who is a comms and technical assistant at the district. On our district board, we have John Mallow and Trish Canonico, both appointees of the North Central MPO. And on the line, we've got Brandon Schaefer from Oedit, who is the director or one of the directors that are helping to organize joint service for the state of Colorado under the Department of Office of Economic Development and International Trade. So we can call on him if we need to dial a friend.

So let's move along on the slide deck, and I'll talk through why we're here today and if we could go to the next slide.

Colorado Connector is the future train service that will be connecting front range communities from Fort Collins to Pueblo. and it's a uniquely Colorado approach, partnering with freight railroads to deliver service. The Front Range Passenger Rail District is the Title 32 Special District, the legal entity that's responsible for planning, funding, building, and operating Colorado Connector. This is intercity passenger rail as opposed to commuter rail. It's a different designation. Inter-city passenger rail falls under the Federal Railroad Administration, and commuter rail is FTA, Federal Transit. And so different designations intended to move people between large metropolitan areas with longer travel of distance in between as opposed to a typical daily service. and Colorado connectors the the brand name voted on by the citizens of Colorado and naming the the service we can move ahead to the next slide I touched on front range passenger rail district it was created in 2021 as I mentioned title 32 special district so we have the ability to refer a tax question And that's something we're exploring for this November. On to the next slide.

We're looking at a phased approach to accelerate service delivery and to save dollars as well. So phase one, and we'll talk a little bit more about this in depth. And this already has its funding already secured and a term sheet signed with BNSF for three round trips with Fort Collins being the terminus of the service. Phase 2 and beyond would take voter approval to move from three round trips to ten round trips and also a local return program that we'll talk a little bit about on a future slide. So we can go to the next one. So joint service at a glance. This is the starter service, the first three round trips. And this is working simultaneously as we plan for the full build out of front range passenger rail. So three round trips per day, seven days a week, station locations, eight stations, 69 track miles, travel time from Fort Collins to Denver, including station stops and recovery time. Recovery time is built in buffer for unexpected occurrences. The cost efficiency, the hard cost provided to us from BNSF is about 60 percent Lor from previous estimates, And delivery will be in 2029 by January 1st of 2029. And this is being made possible with partnerships between RTD, CTIO, the Clean Transit Enterprise, Front Range Passenger Rail, the governor's office, all coming together to negotiate this deal. and if we want to dive in more on this topic I could I could pull up Joan or we can pull her up at the end or call on Brandon but we are trying to wrap up our rail access agreement for joint service with BNSF by July and that is driving a lot of our timeline for trying to button up station alignments and there's a real-world reason for this and that's because we have a favorable administration right now and we have the support to put in a couple hundred million dollars to support this project and we want to button that up before there is a change of administration and there's a determination to use those dollars for something else. And we have this offer on the table right now. So let's strike now and move while we have the opportunity to do so. In the meantime, we're also looking at, and we can move to the next slide, we're looking at full service build out with service to the entire front range going to Pueblo. And then as you can see the dotted lines to the south and to the north. Our mission as a front range passenger rail district is also to ultimately go to state line to state line. This includes our five phases of build out. Each phase is about five years. Upon passage of a ballot measure, we would have phase two delivered within five years of receiving funding from the voters. phase two which phase two would enhance service to the north it would bring service all the way to all of the ! uh... proposed route alignment and uh... we'd also deliver the deploy the uh... local return program uh... to provide dollars for communities such as fort collins for uh... station area development and build out uh... and uh... enhance those station area proposals so let's go to the next slide please uh... i mentioned this it's a uniquely colorado approach to delivery so I mentioned this. It's a uniquely Colorado approach to delivery. So we've assigned term sheet already with the BNSF for the starter service from Fort Collins to Denver. The initial infrastructure needs were jointly defined with the planning team along with BNSF and Union Pacific. And so we have hard capital expenditure estimates. and what we did with the term sheet with BNSF was sort of a unique approach to delivery. So in the United States, rail operators or passenger rail has the opportunity to use a service called 209 powers under the Surface Transportation Act. And that allows state and federal partners to essentially force their way onto private freight lines for delivering passenger service. This is a process that the private freight industry considers to be a conflict-driven process. in their estimation. And instead of using 209 powers that we have the right to use under federal law, we actually went and negotiated directly with the BNSF for access to their freight lines. They showed us how it would impact the cost, negotiating directly with them versus going through the legal process that we had the right to do that they don't particularly like and it saved hundreds of millions of dollars it also meant that we also had to provide some some different characteristics of service so there won't be passenger meets for instance for the initial service the starter service where trains won't be passing going north as they're going south for instance but at the same time part of the character characteristic of services they're going to receive 50% greater access fees annually for providing on-time performance.

This was something we negotiated with BNSF directly as opposed to utilizing the 209 powers that we had the ability to use but didn't use.

So this is a novel approach that has not been done in the country before,

directly negotiating with the private freight railroad as opposed to using the 209 service.

And it's going to allow us to have service sooner and also at a more affordable price as well. So we can go to the next slide. I think there's a lot of reasons for fixed rail. I think a lot of it is intuitive. There is a historic and natural real estate and economic boom when you have fixed rail as opposed to simply having bus service, which is a great service, but all of the above is always a preferred option. The economic multiplier effect, studies have shown that every $1 of transit investment yields $5 of economic return. and we can provide endless data for you why rail is a strong alternative and a good option for transportation alternatives. I think we're going to dive into that just a little bit here. Next slide please. Special event stations, we are considering three special event stations at this time, and we're in discussions with the Broncos about the special event stop at the new Burnham Yard stadium that they are developing. We're talking with the pro women's soccer team, the Denver Summit, about a special event stop at their location along South Broadway, and then also Air Force Academy for a special event stop at the Air Force Academy for Falcon football games. All of these are already along the consolidated mainline. We still need to negotiate with the host railroads on exactly what those look like, but we think it's a real possibility as we move forward with developing the Colorado Connector. Next slide, please. The local return is a proposal to send dollars back to local communities for stations, multimodal connectivity, sidewalks, bike access, transit, community improvements. this proposal is to support the local vision while strengthening downtown communities and the proposal would have local communities maintain local control over stationary ownership and management and for for collins the proposal is to have a local return of 75 million dollars paid out over 25 years. And as we think about what type of economic engine that a station can be, if you look at the photos of Denver Union Station 25 years ago and Denver's Union Station today, on the right, you can really see how a station can be more than simply a place for connecting people but can also be an anchor for other development in and around station areas. Onto the next slide.

Here is a map showing the proposed station alignment in Fort Collins along the consolidated mainline near Drake. This is the preferred location for the station alignment. And I think we might talk a little bit about station alignment in Fort Collins specifically and happy to dive into that in greater detail. You know, from our perspective, we have a desire and need as we're trying to wrap up a couple things. One, wrap up the rail access agreement with BNSF as we sign that agreement and try to have it executed in 2026. At the same time as we're looking at a referred ballot measure in the November ballot, also having a clear description for the voters about exactly what will be deployed if and when we pass a ballot measure so the voters know exactly where their dollars are going, where those local return dollars are going. and and so we've got those two deadlines as we try to get to a description and a narrative of where the station will be aligned and you know i'm happy to talk more about this in a little more detail as we we move forward we are providing as a district a 10 boost on that local return on those local return dollars for communities that can do a resolution or a letter that has an approved narrative on the station area plan or alignment. We're not looking for something that's locking anyone in, but simply something that when it's October and a constituent says, You know, this Colorado Connector plan has described a proposal for a station in a community, something that's been vetted and considered by the local community as opposed to something that is driven by a big, almost statewide special district. So a really local driven and local signed off description or narrative that can move forward if we're considering a ballot question. On to the next slide, please.

So proposed resolution of support.

And maybe cover this a little bit already, but endorse a narrative summary describing the proposed stationery, something that's public facing that has the sign off of the local community has a sign off of fort collins city council and to simply support continued rail planning and collaboration and next slide so moving forward we are continuing with the stakeholder engagement i know we've had a few town halls here in Fort Collins already. We will have another one in Larimer County in July. We are wrapping up a development and operational plans for the public to know exactly what will be deployed when we pass a ballot measure, something that is public facing that also shows the years of technical work that have already in planning that have already been studied and negotiated with the class one freight railroads and then in August we would contemplate referring a ballot measure if we've hit all of our metrics as a district. next slide please so that's the end of my portion of the presentation and I'll probably be calling on friends to help me answer all the tough questions I think so we'll just go to the last

question to remind you all before we kick it off the questions we're asking for tonight is feedback on the resolution and any other questions you might have great thank you so much does council

have questions, comments? Melanie? I'd like to go first. Thank you for the presentation. This is so interesting to hear about, and it's encouraging just to see that there's been so much creative thinking around how can we do this without having to build new rails, because it

seemed like that was a plan that was considered for a very long time and just didn't get off the

ground. So this seems like it's got some legs. Could we go back to slide six really quickly? I could just ask the question, but there's a statement on slide six that I wanted to check out.

I know that there are some folks in the community who have raised some concerns about

in the little host railroads box that BNSF would go from Fort Collins to Westminster and then RTD from Westminster to Denver Union Station. Does that imply that there will be a train change at Westminster for folks riding from Fort Collins to Denver or something else?

No, it's actually that RTD owns the rail from Denver to Westminster. So there wouldn't be any, it's one single ride.

Okay, so you can go all the way to Union Station or beyond. Okay, because I think that is a point of confusion for some residents that I think it would be great to do some education around because obviously you're wanting to present this as the easiest, most comfortable way to get down to Union Station. And if there was a train change, I could see people being like, never mind. So, okay, thank you for that clarification.

That's my only question for right now. Julie?

Yeah, I have a couple of questions. I had a question from a constituent. Will bikes be alLod on the trains?

Yes, that's the plan.

Okay. I see a big thumbs up from behind you as well. And do we have any idea what the cost is going to be? Like, is this an affordable option?

We've modeled out 19 cents per mile, so 69 miles from here to Denver. If I'm doing my math, I think it'll be about $14 maybe.

Okay, we've done a lot of math here tonight. I don't know how much you paid attention to the first thing. And then we did have a community member write in. I'm going to kind of reframe his questions a little bit. What kind of lessons learned do we have from FastTracks?

Yeah, I think there's a lot of lessons learned, and that's driven the entire process. So we have done three years of planning to get here, three and a half years. That planning process costs $6 million. And actually, the corridor ID program at the FRA actually was driven by Colorado because it was... Monterey Park. The corridor ID program was developed under the Biden administration and they were getting it implemented and no other state had gone through this new process for intercity passenger service. And Colorado was the leading edge and built out the very detailed workshopping with the freight railroads where There would be workshopping with the freight railroads and the FRA and CDOT and the FRA and very detailed sort of complex sort of negotiations for determining which projects are needed without the private industry telling us exactly what needed to happen with a neutral arbiter in the middle of it. And to get to a point where every single capital project from Fort Collins all the way to Pueblo went through sort of a mediated process to determine exactly which projects are needed to get to certain levels of service. and so not only have we gone through an entire service development plan process with the FRA and with the Class 1 railroads to get there, we also have the right-of-ways and we have no need for eminent domain or condemnation or acquisition and we are now building out very detailed financial models to ensure that we're able to deliver when we receive the funding for this. Fast Tracks had a great concept, but none of that planning was done in advance. And so even before we go to the voters, we already have a signed term sheet with the BNSF.

for instance. Okay, great. And then, yeah, in the interest of efficiency, I'll just go ahead and do my comments now too. So, well, no, I guess I do have one more question. I mean, I have totally come around to where the station placement is, but it took me a while to get there. And it also took a lot of information, misinformation, information coming from all over the place. I am very happy with what was presented in the packet because it answered all the questions I needed, but then you said something in your presentation that suggested it may be up for discussion, or is it, like, what's the answer here?

The answer is, if it were up for discussion, there'd need to be a lot of money found that we are not bringing to the table right now. and there'd have to be new agreements signed with the bnsf okay so that second part i think is the

key right so bnsf is expecting it to be in this place and that is that is what we have okay model that with bnsf thank you okay so um that was my last question my comments uh i would support bringing a resolution forward i will just say i do have some concerns about how communication is going to happen with the city. Case in point, I think a lot of these people came here tonight, not even knowing that there was something ahead of this that they'd have to sit through two hours. And again, like getting to this point where we had everything in this packet, I have heard so many different things from different areas. So I would love to know what the communication plan is from Front Range Passenger Rail moving forward and how we can make sure that we are going to the source when we need information so thank you that's a great piece of advice thank you other questions comments josh and then ann thank you um thank you for the really detailed

presentation and for the packet um like like she said the information was really helpful especially the scoring of the different locations i'm just curious um i've been in government finance for 20 years and I've never seen a project come in 60% cheaper than anticipated so I'm just curious what were the main things that you know where you found those

savings you know I might bring my call a friend up at Joan Lyons from CETA has

been a part of the planning process and it's actually a rail planner and like

myself hello council members it's great to see you all today and I appreciate THE TIME. ONE OF THE THINGS THAT THE JOINT SERVICE TEAM, THE EXECUTIVE OVERSIGHT COMMITTEE REVIEWED, I KNOW, COUNSELOR, YOU'RE PROBABLY REFERRING TO THE NORTHWEST RAIL PEAK SERVICE FEASABILITY STUDY. SO AS A PART OF THAT PROCESS, RTD EVALUATED LOOKING AT ALTERNATIVES WITHOUT HAVING NEGOTIATED WITH THE HOST RAILROAD, AS SAL MENTIONED. THIS WAS THE FIRST TIME THAT THEY WERE EVER ENGAGED at any sort of level to understand what exactly they really wanted. So as a part of that plan, they did have some information about specific requirements for things like passenger sightings and things of that nature, which of course drive up costs. And so having not negotiated with the host railroad and that being really what they said that they wanted, that wasn't something that the host railroad wanted. So we actually have all of our platforms off of the main line. So there are no platform sightings as a part of this project for the first phase But that may change in the future should the district pass at the ballot. So I hope that's helpful Yes

Thank you that is helpful I think it's it's pretty cool that this is a public-private partnership negotiating this way like hasn't been done in other states where they've tried this. And you mentioned the right-of-way acquisition and eminent domain

and all the battles that can happen from that. So it's really cool that we're able to move this forward. I also am happy to support this resolution and this location.

And Julie, you mentioned the communication. And we've had some discussions, I think, with your staff.

And I'm willing to volunteer to serve in maybe an unofficial role, if you will.

And if you have meetings with a council member, I'm happy to take part in those

It doesn't sound like there's an official liaison, you know appointment or anything like that as far as I understand So I'm just volunteering to help out if everybody else is interested

So thank you

Thank you, I think we need to get Josh a little like engine person engineer cap

He's going to volunteer.

I assumed one would be included when I said that.

Yes, just to say it explicitly to make sure everyone understands.

I'm genuinely enthusiastic about the passenger rail.

I support Coco and really appreciate all of the hard work that has gone into this and the creativity to get to this point.

I do see this as generational infrastructure,

and I'd really want Fort Collins itself to get it right.

So I have a few questions I think before we formally endorse a station location,

especially since we're dealing with the station location that might be seen, or I mean may very well be permanent.

So I'm curious if anyone has modeled the economic difference between locations. so I just I'm really concerned about the Drake location I read the packet I saw the evaluation

and at the same time I just don't know if it's the right answer for optimizing for Fort Collins as a destination I mean to your point a commuter rail versus passenger rail in Old Town is what people come here for so a station that's two miles away connected by max is workable but it's not the same as arriving in the heart of the city and it's I mean rail stations just anchor downtowns in a different way and

generate fundamentally different economic activity than stations and other locations so I'd really like to see that comparison made explicitly

between Drake and one that would be closer to Old Town and again I

I understand that there's a lot of evaluation that has gone into this, but I just haven't seen the economic modeling of the difference in visitor spending,

hotel stays, retail activity between a station at Drake versus one that would be closer to Old Town. I would really like to see that analysis be completed before the resolution come to a vote.

and on that point I also wonder again I appreciate the the foundation but I am concerned that we're foreclosing future network connections by locking in the Drake location so my preference is actually the Old Town location but if that's not feasible the vine and Linden I feel like that deserves a harder look than it received in the site evaluation, primarily just because of network connectivity. So the BNSF and the Union Pacific Interchange in Fort Collins. And when I think about, what is it, the Great Western Railway Branch that runs east towards Windsor and Greeley and that Union Pacific Interchange, I know that that's outside of the scope of this particular project. But when we're thinking about the right decision for our community and what would make sense in terms of that investment, again, that not only we could enjoy in five years or less, but we're talking about what our kids and grandchildren could enjoy as well. All of those lines converge, I think, at Cherry and Linden and in the Vine and Linden area. So Drake is a mile and a half south of that junction, I think, if I measured it right. and any future eastern connection from Drake would require a backtracking or a new connection track. And I think that that eastern corridor matters because it runs towards Windsor and, for example, the northern Colorado regional airport, which, again, would require some investment. But we're making a major airport investment right now simultaneously with potentially a major rail or permanent rail station decision. So I haven't seen any evidence that we've asked if those should be planned together. And I would really like to see, I guess, from staff if any analysis has been done on that kind of long-term connection planning or potential along the Eastern Rail Corridor as well as the BNSF line. And if this Drake Station location affects that potential.

So I think one thing, and I am, Josh is the economist. I'm not the economist. But does the, and he has an engineer cap. So two points. Does the local return funding change the cost argument? So, I mean, the packet presented, I think, like an eight figure relocation cost as a decisive argument for Drake. but I think if I'm reading it right that that framing assumes that the city would bear that cost entirely out of pocket and in the near term but again if I'm reading this right we're eligible for 75 million dollars in local return funding over 25 years and then 82.5 million if we endorse the station vision by June 30th. So if the vine drive relocation cost is at the Lor end of that eight-figure range, it seems like that revenue stream might be sufficient to cover it. And so vine drive or Old Town, either way. But then that would either be directly or, I don't know, something, bonds, something. and we can let people who know what they're talking about,

fill in the blanks on that one. But I mean basically that analysis I don't think appears in the packet,

and it seems like an important financial question as we're thinking about this resolution. So what would be the current best estimate of either the old town or fine drive relocation cost? and has anyone modeled whether the 25-year local return funding stream could offset it. And finally, I'm curious what permanent actually means. So the packet states, and I think Council Member Pinotaro mentioned this, that Drake is going to be the permanent location for the long-term service unless the city pays the relocation costs and BNSF agrees to alter the access agreement. So before we adopt any sort of resolution, I'd like to understand what that permanence means legally and contractually. So is there any kind of, I mean, is it a contractual lock-in? Is it a cost of negotiation barrier?

it concerns me that you know we might wind up with something that isn't serving our community

and like the most ideal way so I really want to understand what we're actually committing to

before we do that because I really do want to support this project but

again have some concerns about the the final terminus as far as it relates to our community

There's a lot there and I appreciate all of the comments and the questions. I'm going to try to cover a couple of the things that you brought up.

So I know you asked about exploring future expansion into communities in the Weld County

area.

It is certainly possible.

One of the things though that we have not done as a part of this project though is typically but

And it would be a future study of such nature. So we do not currently have that on our radar as a state, but it doesn't necessarily mean that that won't happen in the future. There are many corridors throughout the state that are owned and operated by different class one railroads that we know we could potentially expand to beyond what we currently have for front range passenger rail and for joint service and for mountain rail. I also work on that one too.

So there's a lot of different options available to us, and it's certainly something that we have considered um but we're not actively doing

anything with that right now as a group um your question about the access agreement and how permanent it is the current access agreement for joint service is a 25-year term so the location

that the state has taken the position of drake it will not be able to move from drake for that

the term of that 25 year period unless the district renegotiates that access agreement with BNSF so that is something that we have worked very hard on for a very long time and we have worked very closely with staff to make that

determination as I think some of you all are aware there were a lot of costs associated as well with even going further north from South Transit and staff requested for us to consider Drake and I think it's a great location from the perspective of a lot of different things that you can offer to a community you're very close to Horsetooth it's a very central location from a density perspective it's actually relatively decent considering it's within a URA

and you're connected to transit that's existing right now so there are some

added benefits to this location and we certainly are aware of your concerns and I think that Sal can talk a little bit more about what that looks like for the long term.

But from the state's position on how we're negotiating joint service at this time, Drake is the current location.

When I took over this job, I don't know, in November, the service development plan was modeling out South Transit. And so I think we all internally said, you know, we can do better than South Transit.

And so we pushed for something more centrally located in the city. And so Drake was sort of an early little victory we had in negotiations with BNSF and the Joint Service team. As we talk about permanent locations, you know, something that BNSF has really stressed to us is that as you –

When you make a station, it almost never moves.

That people, you know, neighbors will litigate to keep it there, for instance, that economic decisions were made. But as we talk about, as you talk about, you know, a service that can be around for kids and grandkids thinking long term, The ultimate plan is to get to Cheyenne, and ultimately service will be going through downtown Fort Collins. Now, that is a 25-year plan or 30 years away before we contemplate expanding from Phase 5 to what would then be Phase 6. So just being completely transparent, it's not a short-term plan. That is after we finish the 10 round trips from Fort Collins to Pueblo.

That said, I think it's not out of the question that as we're negotiating the next term sheet in 25 years that there's something on the north side of Fort Collins.

But that is not a guarantee by any stretch. And that would be a second stop as opposed to an initial one.

You know, when I first heard about concerns or preferences for something further north in Fort Collins, my first gut instinct was, yeah, that makes sense.

And, you know, stations can be really great anchors in downtown communities. but then as I listen to planners and others and people who I think are smarter than me

talk about

where the residents live in Fort Collins and getting people to the highest ridership numbers it was expressed to me a legit concern that people on the south side of Fort Collins would have a hard time getting up to the north end or be less likely to go up to the north end of Fort Collins to take a trip, let's say, to Boulder or to Denver when there's a lot of backwards trekking.

And so it was really, I was one over on the ridership piece of it and the connectivity with the MAX and transit and everything else.

And so, you know, I'm a believer in Drake now is a good location for really driving ridership and hopefully driving future economic development in that area as well. I had a couple of other notes here. And then the question about local return and the ability for local return to move to help drive the move from Drake to somewhere north. and cover that expense.

That could potentially happen.

However, we still need to button up our access agreement with BNSF

before we know whether or not we're going to have a ballot question passed.

And that's still presuming that Vine is a better location than Drake.

And at least from the ridership perspective, I'm a believer that Drake is the better location.

Okay. I was waiting to be recognized. Yeah, I appreciate those answers, and I definitely hear Ann's concerns about the location. That being said, I'm excited about a Midtown location for those equity considerations around, We have invested in bus rapid transit all the way from the South Transit Center to Old Town and then potentially further into North Fort Collins. I'm thinking about folks who are in Fort Collins wanting to avoid I-25 getting down to Denver. And I think that Midtown location kind of splits the difference between the parts of town. I also, as somebody who accesses Midtown frequently, I think it really is an opportunity for us to add value to that part of town and spur investment. Whereas I could be wrong, but I don't see us at any point slowing our investment in Old Town Fort Collins.

I think that is an engine. I think everybody recognizes that that's a gem. But I look at this as an opportunity to kind of build that level of prestige further south down the college corridor.

So I definitely hear the hesitations, and I also think it could end up being really lovely and, you know, expanding the part of Fort Collins that people want to spend time in into the Midtown area a little bit more.

And I am very supportive of the resolution. I think this is a real gift to our community, and I'm looking forward to it. But again, I hear my colleagues' concerns. And as somebody who represents Midtown, I'm really excited about something cool coming to Midtown. So I'm a supporter. Amy? Thank you. And as much as I want to support this, especially because I'm a Midtown resident too, and it's actually in my district, I think I just have concerns about the timing and about how much control we actually have, like just looking at the agreement and what like what's the rush? We're sitting here like talking and kind of discussing an ideal location, pitting location against each other. When there's so many questions in my mind as far as I mean, because even in the the Drake station wording,

that point number one is BNSF agrees to alter the access agreement and that we will be responsible

for paying the location difference, how much control do we actually have? I'm a part of the transportation board that Tricia, we sit on, and overall they were supportive of it, but they brought up such interesting questions about not, we really don't have a say in the location and it just led me to ask like what is the rush we've had a favorable administration for many years and now it seems like we're being asked to make some really crucial decisions in a month and i think that also does our resolution mean that we're referring we're we're referring this to the ballot, that we'll be asking people to pay a tax for this. And with our community who suffers from our town being cut off a few times a day because of a train from our hospitals and other residences, what will the impact of additional train traffic do to our community? Like those questions in my mind haven't been answered. And I'm hesitant to sign an MOU or support an MOU without understanding this in greater detail. It's a big infrastructure impact to our community, and I want it to be done right, because it is super exciting, and I'm thrilled that it's in District 5. But I'm nervous about being asked to do this so quick.

Yeah, I appreciate the questions and the concerns, and I think one of the things that I didn't get the chance to talk about with your other counselor is the concern about going north and what that entails and how that also can affect operations not only from a free perspective but also from a passenger operations perspective one of the challenges with going more north is the fact that not only would we have to increase positive train control length in track miles which costs a lot of money. We would probably also have to do a lot of crossing improvement work because we want to make sure that things are really safe for people. And as you continue to go further north in your community, it becomes more challenging. And so when we have to work on projects like that, it adds additional costs, it adds additional constraints, and it adds up very quickly. and so that's one of the goals of joint service is it's meant to be generally speaking a Lost cost option and so we it isn't necessarily a Lost cost option in Fort Collins since we did go that additional two and a half miles positive train control on average is about two and a half million dollars per track mile so it adds up over time as you continue to go north but that doesn't even include some of the costs with improving those crossings and potentially at some of the locations, even closing streets to make it safe for everybody to operate and move in their community. And so as a part of the service development planning process, that is definitely a part of what we modeled, is making sure that we can find ways to make improvements that are modest, that are worth the investment, and also aren't going to come at the risk of potentially having additional train traffic into specific areas of communities so that we don't have to impact them with with crossings or doing overpasses or underpasses to avoid them that's very very expensive and requires a lot more takes to what Sal mentioned there's no eminent domain that's a part of this project so I just wanted to make sure that that's addressed I think that Sal also can probably talk a little bit about what the rush is from a district perspective but from the state's perspective on the access agreement. Access agreements, as he mentioned, are very uncommon in the rail industry. Prior to joining CDOT, I worked as a consultant working nationwide on projects like this, and this is not normal. This is very historic and it is an opportunity for us to continue down a path that many states have never done in this lifetime. We've been very successful in doing something similar for the mountain rail corridor with the host railroad for that corridor, Union Pacific, and it's good to keep relationships with host railroad partners, and certainly we want to make sure that we're including them as a part of the process. I know you did also ask about that a little bit. What are they on the hook for, or what do they agree to? Or what are we on the hook

for? Yeah. Because to me, it almost, hearing you say that, it almost, I sound like my predecessor or almost, but it almost, when it's too good to be true, it's probably not. So I just am curious, like, why are they being so generous? Why is this, why? Yeah. I mean, I think that one of the things

that's really interesting, um, across the country is that freight industry is changing. And so they need to be able to find a way to make money. Um, and so passenger operations is an opportunity for them to use their existing facilities to make money. Coal industry in Colorado is certainly going down. There's a lot of other sectors that use freight for their goods and services to move, and it's a way for them to be able to use them. And it's a way for them to be able to use those facilities. ! Depending on the agreement, it can be very beneficial for both partners. ! And as a part of this project, it's certainly beneficial to us because there is no passenger rail service that serves the Fort Collins community. ! But, you know, there are other things that are beneficial to the railroad as well. ! It's a partnership opportunity. And I think that the agreement, generally speaking, is not necessarily going to protrude you all from being tied down other than the going to protrude you all from from being tied down other than the location for that set amount of time and as I mentioned earlier there is the opportunity should should you all want in the district want to pursue renegotiating in future years so hopefully that helps the way that I always like to word it and I think Lisa Kaufman in the governor's office likes toward it is, you know, it's like you're a tenant of a rental. There are specific things that your landlord may want you to do. Maybe you ask your landlord if you want to paint your house purple. Maybe they don't necessarily agree to that, but you find ways to make things a reality by working with them at the table.

I appreciate your responses a ton about the partnership with BNSF because I believe that we, our community would be an ideal partner we've we've i mean we've had a long relationship with the railroad and i think that it would i think it would be very beneficial and i i just want to keep understanding what they think we're on the hook for and what we think they're on the hook for

as we move forward with this yeah and i think that sal will be able to answer a little bit more about what it looks like from a local perspective on like how local control is a part of stations and things of that nature.

So there are really two deadlines and they're pretty close to each other and the reason for, you know, feeling rushed. And one of them is the access agreement deadline.

and I believe we're trying to butt that up by July 6th. So a little bit after Independence Day. So that's just around the corner.

And then we had a goal as a district of having June 30th as the deadline for station narratives with all the communities. there's really no

formal MOU or agreement tied to that it's simply agreeing on a narrative that could potentially be shared if we go to the ballot that deadline is going to be extended because Brimfield can't meet June 30th so we're going to be passing a resolution to extend that probably a couple weeks. But if we're referring something potentially at the end of August, then we as a district want to make sure that we are clearly describing where stations are going and where the local return dollars could be potentially going. We are not asking communities, we're not asking Fort Collins to sign an IGA right now or an MOU, all we're trying to do is have a narrative that everyone agrees to if we go to the ballot. And then upon passing a ballot measure in 2027, we would then negotiate an IGA as to how the local return dollars would be used. And we want it to be driven by the local communities. And then we're modeling for the financial models, the local return dollars coming to Fort Collins and other communities starting in 2028.

Thank you. Can I just ask one more quick question? And I appreciate all this very much. Thanks. In the resolution, Section 1, just about sharing the narrative, could you elaborate a little bit more on what the intent is behind Section 1 of the resolution?

I don't have that right in front of me.

So I really appreciate you all letting me take the time to ask this. Thanks.

Amy, do you want to repeat which section of the resolution again? It's section one after the foregoing recitals in light of the foregoing recitals, which the council hereby makes and adopts it's section one it's on page two yeah the bottom the

last paragraph yeah to share the narrative publicly to reflect the city's current understanding of stationary conditions and planning direction this is really our goal of making sure that the district is not trying to project something for a community that the community has not signed off on and uh we are you know we are pretty flexible in how the narratives are are written and described but we don't want to be if if we are putting together a a a operational plan that includes all of the 12 stations along the front range and we have a narrative for each station we don't want it to be something that's a surprise to the local municipality

I really appreciate that. Thank you very much. Chris?

Yeah, so I'm kind of with Anne on this one, I think. Like, I am a confirmed urbanist and lover of public transit and railroads, which is why I'm so excited about the project, which is why I'm also so dismayed by the choice of station location.

I guess I'm thinking about it

and there's three possible ways forward for this it could be like a park and ride

it could be like a great development opportunity for Fort Collins

or it could be like going to a place people actually want to hang out like Old Town or CSU or something like that

to me it doesn't seem like it's in the back of a strip mall

and on the back of a strip mall and the west side is like horse stables

you know and there's going to be a two substations on various sides of Drake Road and a gas station

so I'm really concerned about the location I was looking at it today and you know a lot of times

and my understanding is like big transit infrastructure like this usually have to be

within like you want people within a half mile walking there and taking it I think right now

there are currently maybe like zero human beings living within a half mile of this station that they could walk to it.

I guess one of my questions is just like, where are we seeing the development opportunities

for dense transit-oriented development in this area? Like what specific parcels? Because I don't really understand where that's going to be located in this area.

I'm happy to initiate that and certainly would welcome insights from the team. I would say the first place I would start with the conversation is around what do we expect from the stationery of a passenger rail. Walk-up is lovely for passenger rail, but it's not an expectation. It's intended to serve the entire community and even beyond. Right now, this is a station that we want folks coming from three to five miles out to come in and use this station, whether they're coming or going. So when we're doing our station planning effort, we're looking at a much larger area than the walk-up distance from the platform. The impact of a platform from passenger rail extends out to multiple miles. so that's our starting point in our evaluation of the station so when you ask where are the opportunities it's a pretty big circle around that entire platform when you really think about it now breaking it down and getting closer and zooming in you can start to peel out some areas it's like yeah you know we're probably not going to see much change from the station in this particular area so when you look at some of those residential neighborhoods that are pretty well established. What you might see there is actually more missing middle homes. That's going to trigger a market condition that could spur more missing middle options. We allow ADUs now. Those are the conditions that would spur some different kinds of housing choices that we're not quite getting in our community yet. When you look at the commercial areas, just significant opportunity along College Avenue. Lots of underutilized properties there with single purpose, single story commercial centers. Lovely for our community, serving us very well. But in communities that get stations, they start to see those shopping centers torn down and replaced with high density mixed use. The market tips where it actually makes sense. It pencils to tear down a shopping center and put in a mixed-use development and create a more walkable area. That's when you have to start to think about the long plays, the long-term opportunities. And so College Avenue and the Foothills Mall, prime areas for significant amounts of infill development. Lots of surface parking. Just look at an aerial and you can start to see. So those are some things that we saw. And then, of course, on the west side of the tracks, you're kind of referencing, it does feel like it's a more established development pattern. But when you look even closely on the west side, it's actually not just horses. There's the federal center. There's a significant amount of offices and employment. And if you look at the layout of those buildings and the land, it's actually not very efficient use of the land. There's a lot of significant surface parkings. Again, more infill opportunities. There's also a bike ped bridge just further north. So folks on the west side can get over the tracks and get to the station. And that's what's going to open up the access to a lot of the employment. So again, these are some things that we've seen. And I know Ann was also asking about network connectivity. This is in the heart of our grid. It's where our most solid grid pattern is. So activity and access from a multimodal standpoint can be very easily addressed. And we could go on and on. I'm happy to do follow-up. But those are just a few things that I wanted to highlight because it's a really important question. And it was absolutely a lot of iterative conversation for us in our own research and homework. I'll pause there and just see what else you might have, Chris.

Yeah, I mean, I think I've expressed it. Like when I look at development opportunities, like Vine and Linden seems like the place that is really ripe for development opportunities. It's not hemmed in by six-lane state highways and six-lane major arterial streets. And so you can actually have a vibrant, walkable area directly around the station. I think Old Town takes you to where you want to go. So same with CSU. if those were options i know there's issues with both of those locations in various ways i i want to be able to support this project but i can't in the current location um i just think i just think there's some serious problems i mean i just think about we've had our own challenges with putting um with putting our own rapid transit along that line and and seeing it fail because it's, it's, it's hemmed in on so many sides and we're, and it's, it's, um, I'm concerned about some of the land use, especially the, you know, there's marshlands or there's, I think it's open space over there or is it a wetlands area? What is it?

There are some wetlands in that area. There's like wetlands and like undevelopable areas in certain ways that are, um, all surrounding the station. Yeah. Which, um, will also be true. And again, uh, and that vine in that vine location as well. So, um, I do think, um, in any location that we look at, we know we're going to have some of those factors that we are going to be working

around. Sure. Um, so anyway, I think I'll, I think those are my concerns. I think the station is like, I think to my understanding is that I really want this to work and I really want it to be a symbol of the ability of Colorado and our government to actually achieve meaningful success. It feels like we're the endpoint on a map that is outside of RTD, rather than finding a meaningful station for Fort Collins, that's really going to help us in the future.

I guess I'll end there. So I think, yeah. It's hard for me to imagine people driving five miles to a central station and then taking a train, when if you're already driving like why aren't you just driving down to Denver and parking there so I really think of this as a opportunity to reshape the kind of transit patterns rather than simply giving people another option to drive and then leave their car somewhere so I appreciate the work on this but I think unless we can move the station further north I think it's gonna be

tough. Melody? Yeah, and again, I appreciate that perspective, but I'm frustrated with the

discussion of the only part of Fort Collins that's worthy of investment is Old Town. There are lots of people in Midtown who appreciate Fort Collins, utilize Fort Collins, like Karen was talking about. We talked a lot about our underperforming mall. That's a great opportunity for redevelopment. It just feels like all of the resources when we think about where do we want to pump it in, pump money in, it's Old Town and then by extension North College. Midtown's important. Midtown is a really great, like it's at a turning point as far as where historically it was built. And it's a chance for us to take a part of town and make it really

special. I just get frustrated with the dialogue about everything being about Old Town. People are going to go to Old Town, whether they take the train within two miles of it and have to take a bus or an Uber or not because people like to go to Old Town. But like funneling people straight through Midtown, every single opportunity we have, I think, is a real missed opportunity so I understand that I seem to be alone in

that perspective but I think this is a this is a good opportunity for us to revital not revitalize it is not a blighted area but to maximize a part of town that I think has been neglected with our city investments sorry we're gonna go Josh and then Julie and then Amy thank you I appreciate my

colleagues concerns as well. I, I worry on the other hand, we know that moving to Vine would

cost about $10 million just for the four miles of control, positive control or whatever. Positive train control. Yep. And then there's probably millions more, as you mentioned, in grade crossings and things like that. And so we would be going to the voters asking to support a sales tax for something that we've made tremendously more expensive through our own choice and that doesn't feel like a good ask of the taxpayers. I hope and I was glad to see you know maybe there's a second station near Vine because I'd love to have a station near Vine on the way to Cheyenne that'd be great as a as a endpoint if you will. I think in this case we might be letting the perfect be the enemy of the good so to speak. I think we have an agreement from the railroads, agreement slash direction from the state. We went through a process that was several months. I think, you know, it was initially going to be the South Transit Center, and there was more discussion, more analysis, and it did move north, and the South Transit Center would have been either my or your district, and, you know, that would have been great, but I think it would have been a terrible location, honestly. People way on the north side of town would have said forget it I'll get on I-25 I worry that if we start on the north those of us in the south part of the city will either go to Loveland to get on which I would still rather do than get on I-25 and as we do that maybe we buy a few things in Loveland instead of buying a few things here so there's a little bit of you know economic analysis there or maybe I'll look at Google and it'll show 25 is green and I'll say forget it I'm just gonna drive to downtown Denver and then it'll be red on the way back. So I agree with Melanie that I think, you know, we've talked a lot about going for infill in Midtown, and this is a good way to do that. I mean, we all know that there's commercial properties there, other things that we want to replace with more density, and this would be a good start for that. So I agree with that. And then it sounds to me what little I know about the abundance framework, right? We've, several of us have talked about it and learned about it, which is try to go for those quick wins to really expand public services as opposed to these, and please don't take this the wrong way, but these long, drawn-out discussions and more regulations and more costs. This, to me, represents kind of one of those quick wins that we could get this going. So those are my thoughts. I hope maybe I've helped address some of your concerns. I appreciate them. I understand them. I totally get it. I don't want this to be a south versus north versus, you know, which part of town, because that wouldn't be great. So, yeah, those are the reasons I would support continuing in Midtown.

Yeah, I just, I too, I want to do a shirt. Melanie, you are not alone at this at all. Because also, you know, a large portion of the district that I represent is here as well.

And I think that for those that don't spend time in Midtown, they're really shortchanging, like the options that are out there. Hence my first question about bikes.

It is so easy to take Swallow or any other back roads around District 2, that part of District 5, to get to where the station is where you not only have the MAX, you have the Mason Trail that will hook up with Spring Trail.

I mean, there's just a million, I don't know, not a million, but there's many, many different modes of transit that you could do in this area. as well as I used to work in that federal center.

And it is true that is some land that I hope at some point, I think CSU owns it at this point, but there is a lot of opportunity over there as well as we'll have our first bike roundabout right over there. I'm just realizing as well.

So I too want to agree with Josh. I don't think, will it be perfect right out the bat?

Absolutely not. Like, I think this is kind of learning as not learning as we go. But, you know, as I think of agile software development, you know, this is that minimum viable product. Let's support what we can for this city and then improve upon it as we learn our lessons. So thank you.

Thank you. I'll be quick. I just want to appreciate very much what you said. I agree with you too, Josh, and everything that you've said as well, Julie. And if there's any way that I can participate to the degree that Josh has offered, I would love to play a role. Because this is so important. And it's extremely exciting to think about. And I just have questions. So I want to understand in order to get to yes. And I'm not at no, but I just want to fully understand. Thank you.

Well, thank you for the conversation. I would say that there's no perfect location. And I can see, you know, why the north location is appealing and makes sense. And on the, you know, and I can also understand why Midtown is also a great location as well. So, you know, I think this is part of the struggle as Amy was talking about the short timeline. I understand the reason of trying to push it through. It's helpful to have the site analysis, but with the short time frame, that also means we don't really do a lot of community engagement to see really where the human behavior aspect overlies the analysis of how far are people going to travel? Where are those people going to travel from? Are they going to drive? Are they going to park? And then also, you know, people coming up from other locations. So it is difficult just to look at the analysis and say, well, then this is the best part because it takes the human context out of it. And I think something else is that there doesn't seem to be consensus on what the front range passenger rail is going to attract. I mean, because I heard a lot of like, well, there's offices and there's, well, is it a commuter rail or downtown? Is it an economic driver? So there doesn't seem to be like a, you know, with the analysis and where we're going, what do we really see the potential of the front range passenger rail to be? Is it all of those things? I think that's what makes the conversation difficult because absolutely the economic, you know, that Ann was talking about is a huge part of it. But then also like the central location, that's also important. So I think that's why the conversation is difficult because I'm not really sure if we have an idea of who the front range passenger rail will be serving and why and what the focus is. Because I don't think we would have a commuter rail that's also serving as like a destination rail, right? Those are two different things. So I think that just makes it a little difficult. I don't know if you have a response, but you're shaking your head. I do, yeah. Okay, great.

Great. I really love this fact, and I know that it's going to eventually be in the operating plan for the district. But throughout the Front Range passenger rail district, so the entire Front Range, 75% of people live in that area, and they also work in that area. But there's a lot of other things that are in that area as well. Schools, universities, institutions, hospitals, child care. I think that to your point, it's a very much so a combination of all of those different things. It's a service that helps all Coloradans, 75% of our population to be able to go where they want to go throughout that broader region. And so I think when we think about who we're serving, it's everybody. And there's lots of different trips that people will probably generate. I certainly can pull this up here in a second looking at some of our ridership modeling, but there's a lot of ridership built out to 2050 where there's going to be a lot of people that are taking it across the entire corridor. So you may see people maybe even that are visiting family members that live in other parts of Colorado that just don't want to drive. Or maybe there's disabled members who do not want to be able to drive to their appointments at big major care facilities. It really depends, but I think that because it serves that mass populace of the state of Colorado, it can really affect change throughout the entire state. And I think Sal has some other responses as well.

Yeah, I would add that across the country, we've seen commuter rail take a little bit of a dip, especially as we've seen a change in work pattern since the pandemic. But at the same time, across the country, we've seen intercity passenger rail really rise in its use. The last passenger corridor to come online nationally was developed by the Southern Passenger Rail Commission, and they called it the Mardi Gras Express because they conclude in their terminus in New Orleans along the Gulf Coast. And they exceeded their annual ridership projections in like a four-month time period. So typically in intercity passenger rail, you're seeing people who are traveling for more than work. So students trying to get to a college campus or someone who wants to go to Denver for the big game or someone who wants to come to Fort Collins for the big game, someone visiting grandparents for the weekend and want to get out of traffic. In this case, it's sort of a unique corridor because of the proximity to employment centers as you think about the industries between here and Boulder and opportunities for high tech and connectivity with higher education. And so I do think there will be some commuter service. But because of the nature of the communities here, I don't think you'll see that as much in the south, for instance. But, you know, it's about having a more comfortable, more convenient way of traveling that gets you out of the highway traffic.

and I think yeah and I appreciate the perspective of we're building this for all of Colorado I'm here to represent Fort Collins and my question is what are we saying is the benefit to residents is it commuting is the economic poll like where are we really focusing and how is that influencing our analysis about where we're choosing and where we're recommending and on the other side I'm just gonna push back a little that it's not for every Colorado and because if a round trip to Denver and back is $28 and so me and my partner goes that's 50 of I have a family of four that's $100. That's out of reach for a lot of Coloradoans. That's not going to be for everyone. It's for people who can afford to take it and be on a flexible time schedule. So it's an appeal. And so this is why I'm asking is, who is this for? And where have we really done the analysis of who's going to take this? And I mean, don't get me wrong. I 100% support the idea of the passenger rail. I think it's just really difficult to narrow in on the location when some of these things are still unanswered. I think for us as council obviously and us as a city because we haven't been able to do a broader engagement On where people want the station and what they would use it for because I think we'll a very big Community by community and who's using it and then also when we're just thinking out the next 25 years I mean currently in Fort Collins We're not seeing a lot of redevelopment for infill right and we're seeing a lot of greenfield Which is more the vine intersection, so there's just a lot of things that go into it I would say we're never going to get to a place where we have a perfect location because I think there's an argument for everyone except for the South one which I think is a bad location so I'm just I guess I'm just saying I think you're hearing general support for the idea there is some disagreement about the location and I would just love maybe if staff has some follow-up ideas on how we're using this analysis and what we really see for Collins benefiting and And also, I do have one question, actual question, which is, do we think the return of funds is going to cover the maintenance costs that we're going to be responsible for? Have we done that analysis?

We've not done the analysis yet. What we want to do is, as part of the station planning process, we'll also be able to surface what other potential investments would be needed because the funding can also be used for other capital investments to kind of make it station ready. So we'll look at any operation maintenance costs as well as any upfront capital investment costs that we might want to consider with those dollars. And what's the timeline on that? We just kicked up the station planning process. So in the next couple months, we'll have more information to come back. So our intention was to come back for a work session to focus on the station planning work.

How do you foresee yourself using this train? But I don't know that I would want to put out the station location because one costs $10 million and one doesn't. So to me, I would really be interested to hear is that people are like, I'd like to go to a Broncos game without driving or I take the bus staying now and I think a train would be easier to work on. If we had time, that's the kind of feedback I think would be most reassuring to me. But I worry a little bit about the public having a false sense that they actually get to weigh in on the station location. I don't know. It doesn't seem like we really have that much flexibility right now is what I'm hearing.

Am I wrong? I just have a follow-up question to that, which is, if we have no flexibility, then is there any chance that the four of you would get to yes? And if the answer is no, then we need to know that right now because you're just wasting everyone's time

And it's gonna be a lot of work for nothing. Well, I heard so just to be clear. I I support it moving forward So I heard and Chris having some person Amy, so that's three

I'm a maybe

I have concerns and I would like to have some of those questions answered to help inform feel like I'm making an informed decision because right now again there are short term benefits and don't get me wrong like I love trains like trains are amazing. I take trains wherever I can and I actually when I moved here I thought the max line was going to be a train and then I was very sad to I love the max but I thought I was gonna I was gonna be able to like you know do everything that this train is is promising to do but there are some long-term planning questions that I would like to hear from our own staff to to get there okay so it

sounds like some follow-up do we do we get to four people being like we will

probably support a letter I'm gonna turn over to Kelly yeah her summarized what

she heard so um I so typically in a work session we would be looking for a direction for at least three to bring something forward. I definitely heard three in support and a couple more in still debating. So I feel like we have enough to bring something forward on June 16th is when we would bring that forward with some additional follow-up work that we'll try and do. And again, I just want to maybe be realistic about, you know, we're not going to be able to do full additional analysis on things between now and June 16th. So we'll answer the questions we can with the information we have available. And I want to be realistic about how much we'll be able to do in that time frame.

One quick thing. It might be helpful just to clarify the time frame because I think we came in to the work session understanding June 30th to be the deadline. And did I hear that maybe it's not the deadline?

um we are going to extend the deadline to make sure that communities have a little extra time uh you know specifically we're asked by broomfield and we're happy to do that so we have not done that formally as a board yet but we might be taking it up this friday at our board meeting um to extend that deadline and and i do want madam mayor i do want to try to answer your question about the purpose and a little bit about, you know, if I can divulge for a sec about my background. I got involved in passenger rail when I was a county

commissioner in Pueblo and the Southwest chief line that didn't even come into Pueblo, but

It goes to Chicago to Los Angeles and connects Trinidad, La Junta, Lamar to long distance rail and start getting involved in trying to save that line. And we were eventually successful. So I started pushing for front range rail. I've only been in this job for six months, but pushing for it about, I don't know, a dozen or 15 years ago. and I've seen lots of polling on this service over the years. What I can tell you is the polling, people don't support it for the economic reasons. People don't support it for downtown revitalization. What we see consistently, what I've seen consistently in polling for 10 years is people want to get connected to other communities, and that's the number one people want passenger rail service.

Great, thank you. All right, anything else?

Yeah, I just want to, I'll just say to Melanie,

the reason I think it should be further north is,

I hope it's not heard as something like the parts south of town worthy of the station or something like that. It's that I'm hoping that the passenger rail is,

I think this location is super important to the success,

and I'm rooting for the success of this thing full stop.

so if I'm proven wrong and it flourishes at Drake and College I'll be very happy person

so I'll just say that so I'm okay Chris don't worry anyway I just don't want to hurt our you know my friends who live in you know south of Drake or whatever so all right anything else

seeing none thank you very much thanks for the presentation

Does council members have any announcements? Okay, seeing none, we will adjourn. Good night, Fort Collins.

Thank you.