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HomeMy WebLinkAboutCity Council Agenda Packet 07/28/2014CITY COUNCIL AGENDA: July 28 , 2014 Page -2- $37 ,000 for the purpose of funding current Enhanced Sales Tax Incentive Program Agreements payments 4 . Motion to approve payment to Dillon Companies in the amount of $107 ,108.23 for the 12-month period ending June 30 , 2014 in accordance with an Enhanced Sales Tax Incentive Program Agreement ~ Motion to approve payment to Commercial Fitness Solutions , Inc . in the amount of $42 ,255 for purchase and trade-in of commercial treadmill equipment per RFP-14-17 6 . Resolution 44-2014-A Resolution amending the Fiscal Year 2014 General Fund Budget to reflect the approval of a supplemental budget appropriation in the amount of $2 ,500 for the purpose of sponsoring the 2014 Arvada Community Food Bank 's Top Hats & Ball Caps fund raiser CITY MANAGER'S MATTERS CITY ATTORNEY'S MATTERS ELECTED OFFICIALS' MATTERS ADJOURNMENT CITY OF WHEAT RIDGE, COLORADO 7500 WEST 29TH AVENUE, MUNICIPAL BUILDING July 14, 2014 Mayor Jay called the Regular City Counci l Meeting to order at 7 :00p.m . PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA ROLLCALL OF MEMBERS Jerry DiTullio Bud Starker Zachary Urban Krist i Davis Tim Fitzgerald George Pond Tracy Langworthy Genevieve Wooden Also present: C ity Clerk , Janelle Shaver; City Treasurer, Larry Schulz ; C ity Attorney , Gerald Dahl ; City Manager, Patrick Goff; Parks Director, Joyce Manwaring ; Public Works Director, Scott Brink ; Community Development Director, Ken Johnstone ; interested citizens . APPROVAL OF MINUTES OF June 23,2014 Councilmember Wooden noted two typos . Motion by Councilmember DiTullio to approve the minutes of June 23 , 2014 with the corrections ; seconded by Councilmembers Pond and Starker; carried 8-0 CITIZENS' RIGHT TO SPEAK Paul Balaguer (Boulder) was hired by WR2020 to help organize the recent C ri terium bicycle race . He pra ised it as an outstanding success and noted stellar reviews from racers , officials and spectators . Attendance was the best of any bicycle race in the state so far this year; the pres ident of the Bicycle Racing Association of Colorado has asked that this be upgraded from Bronze to Gold designation next year . Title sponsor Wheat Ridge Cyclery had the ir highest sales day of the year . -He acknowledged the support of the City and its staff. Having directed Ride the Rockies for 22 years and Boulder's US Pro Challenge , he has worked with over a hundred city , county and state government jurisdictions . He said working with our City officials and staff was second to none . He specifically acknowledged the Police Department whose outstanding support was headed by Wade Hammond . The Fire Department's emergency medical support , headed by Bob Dowling , was an enormous asset. The Pub lic Works Department did an outstanding job to ensure the course was in good condit ion and he is grateful for the efforts of Steve Nguyen and the Engineering Department. He acknowledged Mara City Council Minutes July 14, 2014 Page 2 Owen , Britta Fisher, and Kim Snetzinger of WR2020 and expressed they are all looking forward to working with the City again next year. Vivian Vos (WR) asked why citizens never see a treasurer's report . It is not on the City website . The Comprehensive Annual Report on the website is from 2012 and should be updated . She'd like to see citizens better informed about City investments, our rating on investments, and the financials from Urban Renewal. -Mr. Goff will talk to her after the meeting . Thomas Lundy (WR) expressed concerns about the notion that a WaiMart may come to 38th & Wadsworth. He believes WaiMart is notorious for its destructive business practices and its habit of destroying City resources . He thinks this would be a bad fit for Wheat Ridge and the model that's been shown is obsolete and outdated . He reported there are several citizen groups organizing to oppose any attempt to put a Wal Mart on that property . There are already signs and Facebook pages . He suggested citizens take a positive approach and let the owners know this isn 't necessary or warranted. Janeece Hoppe (WR) announced the Cruiser Crawl this Thursday starting in front of WR Cyclery at 6 :30pm and Yoga in the Park on Saturday at 9 :30am . Dorothy Archer (WR) spoke against WaiMart coming into Wheat Ridge . She doesn 't think this fits with efforts to encourage small businesses to locate here . -She supports 38th Avenue but is concerned about the money that's being spent on 38th and thinks we should wait until the sales tax comes in from all the new businesses . -She is concerned that Marshal to Harlan is being left out of the plan for 38th Avenue . -She thinks the lamps on 38th should be purchased from Public Service. We could decorate them ourselves with hanging baskets and we wouldn't even need planters. APPROVAL OF THE AGENDA PUBLIC HEARING AND ORDINANCES ON SECOND READING • • • • • • ~ Council Bill No. 08-2014-amending the Wheat Ridge Code of Laws concerning the keeping of Dwarf Goats Dwarf goats (generally 40-60 pounds) to be allowed under large and small animal codes Lots with less than 9,000 sq. ft . of open lot area are limited to three goats . Un-neutered male goats will not be allowed . Restrictions for shelter structures similar to those for other small animal and poultry structures. For lots larger than 9,000sq. ft. six dwarf goats equal one horse equivalent unit. Requires 130 sq . ft. of permeable area per goat. City Council Minutes July 14, 2014 Page 3 Councilmember Langworthy introduced Council Bill No. 08-2014. Clerk Shaver assigned Ordinance 1552. Mayor Jay opened the public hearing. Mayor Jay swore in the speakers for the hearing. Ken Johnstone gave the staff report and added more details. Dwarf goats are half the size of regular goats (or smaller) and our code is currently silent about them. Raising them is an increasingly popular trend -whether for dairy purposes or as pets. The Animal Welfare and Control Commission recommended approval of this change to allow dwarf goats on smaller properties. The Planning Commission had no recommendations for amendments to the proposed changes. Public Comment Sundari Kraft (WR) passed to Council a letter from Denver City Councilwoman Susan Shepherd in support of allowing dwarf dairy goats similar to what was done in Denver. Ms. Kraft spoke in support of this change to allow dwarf dairy goats in the City. Mayor Jay closed the public hearing. Motion by Councilmember Langworthy to approve Council Bill No . 08-2014, an ordinance amending the Wheat Ridge Code of Laws concerning the keeping of dwarf goats and that it take effect 15 days after final publication; seconded by Councilmember Wooden; carried 8-0. 2. Resolution No. 39-2014-establishing a Street Width for 38th Avenue from Upham Street to Marshall Street in accordance with Phase II Design Plans prepared by Entelechy and accepted by the City Council on June 16, 2014 Councilmember Davis introduced Resolution No. 39-2014. Mayor Jay opened the public hearing. Mayor Jay swore in the speakers for Item 2. Scott Brink gave the staff presentation. He went through the history of the project to date and provided pertinent considerations and proposed measurements for the project. • During the public process sidewalks and amenity zones were the highest priority • The design tries to limit the impact to private property and businesses • Proposed design measurements are: • Two 10 ft . travel lanes for traffic, with one 11 ft. center turn lane • 6 ft . parking lanes, with 2 ft. for curb and gutter and 8 ft. sidewalks City Council Minutes July 14 , 2014 Page4 • • • • • • • • • • • • • • In the eastern area where there is a 63ft. ROW, and no need/space for on-street parking , there would be 6ft. amenity zones and 8ft. sidewalks . • In the western area where there is a 75ft. ROW, the extra space would be used for parking and bulb-outs at certain intersections. If approved tonight , staff can have design contracts ready for October 13, 2014 . November-April would be for final design and construction plans , with construction beginning next June or July. Per City Charter, construction must begin one year after street width designation Current street width (flow-line to flow-line) is generally 50 ft . Proposed new street widths vary from 35-37 ft . Data has shown no discernible trends/changes in traffic counts on 38th Avenue . Parallel routes (32"d & 44th) show no verifiable diversion Pedestrian and bike traffic counts show no trends . A minimal increase in pedestrian traffic at Harlan may be due to the new 7-11 . Analysis of the road diet metrics is difficult due to so many other things going on . Sales tax revenue is up in the corridor since 2011 . Underground utilities will be a consideration . Storm sewers may have to be moved or rebuilt due to the other utilities . Public process will continue as businesses will be impacted during construction . Phasing of the work is probable to keep the street open as much as possible . Mr. Urban had concerns about the implication that Council has accepted the design , when it has not. There was discussion about designating the street width when the design has not been formally accepted by Council. Mr. Goff relayed Mr. Dahl's suggestion that the resolution can be reworded to say the design has been "reviewed " by the Council. Ms . Davis asked if property owners could have benefit of lower costs for repaving on private property when this repaving happens . Scott Brink suggested that is likely possible . Public Comment Herb Schillereff (WR) is opposed to narrowing the street. It hasn 't been taken to the citizens and there 's been no discussion about the cost and how it 's going to be paid for. He believes it should go to voters. Janeece Hoppe (WR) testified that she has seen new businesses in recent years. She appreciates all the time and effort that's gone into this project and hopes Council will continue to move forward tonight. Jerry Nealon (Lakewood), business and rental property owner in WR , thinks Council is doing what's best for Wheat Ridge . Peo~le and businesses are moving here based on the promises of what's happening on 38t . Set the street width and get it done. City Council Minutes July 14 , 2014 Page 5 Adam Wylie (WR) is happy about 38th Avenue . His property value has increased. Council built it [the road diet] and people came . People continue to move here , not just because it's close to Denver. He believes narrowing 38th is worth the investment. Sundari Kraft (WR) recently moved here from Denver because of the investment in the City . Her family enjoys shopping locally and walking. They enjoy the feeling on 38th . Thomas Slattery (WR) thinks this is premature; they don't know how it will be financed. Traffic is up in front of his house on 32"d . In surveys people have indicated there are other priorities. Improving the street doesn 't necessarily mean you have to narrow it. He recommends putting it to a vote of the people. Kristine Disney (WR) is excited about the improvements in Wheat Ridge and that the City is getting an identity. She understands older citizens are concerned about the cost. She is too, but believes it's necessary to attract exciting and interesting businesses. The City has done excellent work and she praised the City website . Chris Boardman (WR) encouraged Council to move forward with the project. Pat Mucilli (WR) addressed the City-owned parking lot next to his building. He said the City doesn 't take care of it ; he has to . How will the City take care of all the new sidewalk? He thinks 6 ft. wide parking spaces are too narrow. He encouraged postponing this indefinitely and putting it to the voters of Districts 1 and 2 . Rachel Hultin (WR) addressed the history of the width of 38th Avenue. She's concerned that putting this on a ballot will tear the fabric of the community . She thinks the correct way to handle this is on the dais . Jon Genova (WR) has been to the outreach meetings and advocates the 3-lane design as an integral part of making a walkable, vibrant downtown. He urged Council to pass the resolution. Kathy Tolman (WR) encouraged Council to put this to a vote of the people. This affects everybody, and we deserve to have a say. Suzanne Kay (WR) is thrilled with the renovations on 38th Ave . She thinks the street has made a big difference . She thinks it's very important for the City and doesn 't know anyone who isn't for this. Tiffany Barnhart (WR) gave support for traffic slowing measures on 38 1h Avenue. She asked Councilmembers if they will be leaders or naysayers . Vicki Oddison (WR) is undecided about the street , but supports letting the people vote on it. It's a $10 million sidewalk. Property values are rebounding ; people will continue to move westward (here) whether we narrow 38th or not. She wonders what the return on investment is . City Council Minutes July 14, 2014 Page 6 Tara Jahn (WR) spoke about the number of opportunities for people to be involved in their community . She appreciates the community involvement and being a WR2020 Board member and community organizer. She's excited to see the investment in public spaces to support a culture of connection and community. Safe, inclusive spaces are important. Margie Seyfer (WR) thanked Council for what has happened so far on 38th . She loves the energy. We need to move this city forward. We were blighted 20 years ago, and if we don't do this we'll be blighted again. Judy Hemmer (WR) said she avoids 38th since the road diet. She believes closing two lanes on a thoroughfare doesn't draw customers-it's having businesses where people want to shop. She asked Council to put it on the ballot for voters to consider . Lloyd Levy (WR) read a letter he sent to Council. He supports any action by Council that makes the public investment happen. He prefers Council decide the street width tonight, but if it is referred he thinks all four districts should vote on it. Tom Yang ("heavily invested in WR") owns property on 38th Avenue . He and the owner of The Office recently spent almost $50 ,000 on an awning. He hopes Council will vote for this to go forward . Monica Duran (WR) said everyone feels passionately about revitalizing 38th Avenue. She called on Council to keep their word in representing all the citizens and urged them to put this on the ballot in all four districts . Mike Stites (WR) supports revitalization efforts and thinks that can be achieved without narrowing the street. He addressed the federal disaster plans that designate 38th Avenue as an evacuation route . Fire Department data also shows that response times eastward on 38th are slower. He asked Council to put this to a vote of the people . Roger Loescher (WR) thinks the street is not important; it's what's behind the street- the businesses. Spend the money behind the street. He addressed the cost and funding. He said people are coming here because property costs are lower and we need the street to move the new people . Don Eafanti (WR) owns a business on 38th . He has no personal axe to grind, but doesn 't think it's safe now . He's witnessed 22 accidents himself, plus cars hitting the planters and driving away. He listed other more serious priorities for safety. Patrick Stanley (WR) expressed his support for the proposed new width as it will make businesses/people want to go there . He's concerned about fairness to businesses that invested here because of the promise of revitalization . He moved here because of the promise . City Council Minutes July 14, 2014 Page 7 Clerk Shaver informed Council that a legal protest was received this afternoon. An adequate number of valid signatures were verified thereby requiring a supermajority vote of Council to pass the resolution. Mr. Dahl expounded on the Charter provision for street width designation. It will require six votes to pass the resolution. Questions from Council followed regarding the protest process, and the next possible scenarios. Mr. Dahl explained. Councilmember Urban asked where the money was going to come from for this. Councilmember Davis noted they've talked about this at the retreat and study sessions -that revitalization is necessary regardless of the street width and will require spending money. Councilmember Urban believes the cost of narrowing the road should be discussed as part of the question to voters-to let them know how it will be paid for. To not discuss it sends voters the message that we have the money for this, and we don't. Councilmember Pond said designating the street width doesn't require spending money. Mayor Jay closed the public hearing. Motion by Councilmember Davis to approve Resolution No. 39-2014, a resolution establishing a street width for 38th Avenue from Upham Street to Marshall Street in accordance with Phase II design plans reviewed by the City Council on June 16, 2014, and I further move that Section 2 of the Resolution be amended to read in its entirety as follows: Section 2. Effective Date; Ballot Question Submitted. This Resolution shall not become effective unless and until approval of a ballot question by the registered electors of the City of Wheat Ridge at the November 4, 2014 election, said question to be submitted as a referred question pursuant to Charter Section 6.3; seconded by Councilmember DiTullio; Discussion followed. Councilmember Davis, Fitzgerald, Starker, DiTullio expressed satisfaction with sending this to a vote of the entire City. Councilmember Pond acknowledged the thorough process and will vote for this, but thinks street width designation is not about a design and encouraged everyone to communicate about the design and the importance to the community. It was clarified that the width measurements in the resolution can be addressed when the ballot language is set. Motion carried 8-0. City Council Minutes July 14 , 2014 The meeting recessed at 9 :15pm. The meeting reconvened 9:29pm. ORDINANCES ON FIRST READING Page 8 3 . Council Bill No . 09-2014-approving the rezoning of property located at 7671 W . 32"d Ave . and 3299 Wadsworth Boulevard from Residential-Two (R-2) to Planned Residential Development (PRO) and for approval of an Outline Development Plan (Case No . WZ-14-06/Grove 21) Councilmember Fitzgerald introduced Council Bill No. 09-2014 . • The property includes two parcels totaling 3.48 acres and contains abandoned houses . • The rezoning will allow for construction of a single-family , urban neighborhood of 20 small lots having a minimum of 3,500 square feet of area . • Side yard setbacks are proposed to be 5 feet. • Front yards will be no more than 10 feet deep. • Rear yards will have a minimum 15 foot setback. • Removing street right-of-way area results in a density of 8 .73 units per acre . This rezoning and ODP process is the first step in the development process . It will be followed by a Specific Development Plan (SOP) and plat, which is subject to Planning Commission and/or City Council approval. Motion by Councilmember Fitzgerald to approve Council Bill No . 09-2014, an ordinance approving the rezoning of property located at 7671 W . 32nd Avenue and 3299 Wadsworth Blvd . from Residential-Two (R-2) to Planned Residential Development (PRO) and for approval of an Outline Development Plan on first reading , order it published , public hearing set for Monday , August 11 , 2014 at 7 p .m . in City Council Chambers , and that it take effect 15 days after final publication ; seconded by Councilmember Starker; carried 8-0 . DECISIONS, RESOLUTIONS AND MOTIONS 4. Resolution 40-2014-amending the Fiscal Year 2014 Capital Investment Program Budget to reflect the approval of a Supplemental Budget Appropriation in the amount of $750 ,000 for the purpose of retaining professional services for the design of construction plans for the proposed 38th Avenue improvements Councilmember Starker introduced Resolution No . 40-2014. This appropriation will allow staff will put out a Request for Qualifications (RFQ) for completion of a survey , design work and construction plans for the project to narrow 38th City Council Minutes July 14 , 2014 Page 9 Avenue. There are adequate funds in undesignated General Fund reserves to cover this. There was discussion about whether it is premature or appropriate to send out an RFQ for design work and construction plans when the project is dependent on voter approval in November. • Mr. Dahl advised that the two actions are related but not legally dependent on each other. • Councilmember Davis wanted citizens to now that the RFQ process will take awhile and the bid could be awarded after the election. • Mr. Goff confirmed that the actual awarding of the RFQ could be delayed until after the election . • Councilmember Urban had questions and concerns about spending this money when the future of the project is uncertain . Mr. Goff acknowledged there would be a certain risk for bidders, but information about the election will be in the RFQ . Motion by Councilmember Starker to approve Resolution No. 40-2014, a resolution amending the fiscal year 2014 Capital Investment Program Budget to reflect the approval of a supplemental budget appropriation in the amount of $750,000 for the purposes of retaining professional services for the design of construction plans for the proposed 38th Avenue Streetscape Improvements; seconded by DiTullio ; Councilmember Urban said he can 't understand appropriating $750,000 for a project we just asked the voters to tell us how to proceed on. -Mr. Goff said if the issue doesn't pass the money won 't be spent. -Mr. Dahl said the earlier public hearing started the one year clock ticking. -Councilmember DiTullio said he thinks it's just being prepared in case it passes . -Councilmember Pond feels we have a responsibility to pass this. Motion carried 7-1 , with Councilmember Urban voting no . 5 . Resolution 42-2014-approving the Second Amendment to an Intergovernmental Cooperation Agreement between Jefferson County and the City pertaining to Community Development Block Grant Funding Councilmember DiTullio introduced Resolution No . 42-2014, and asked the Clerk to read the summary. By joining with unincorporated Jefferson County and adjacent small cities, Wheat Ridge can qualify for these federal funds from the Department of Housing and Urban Development (HUD). CDBG funds can be used for housing and other infrastructure and amenities in low/moderate income census tracts . Motion by Councilmember DiTullio to approve Resolution No. 42-2014 , a resolution approving the second amendment to an intergovernmental cooperation agreement City Council Minutes July 14, 2014 Page 10 between Jefferson County and the City of Wheat Ridge pertaining to Community Development Block Grant funding; seconded by Councilmember Urban; carried 8-0 . 6 . Motion to award a contract to GreenPiay, LLC in the amount of $49,989 for Consultant Services to update the Parks and Recreation Master Plan per RFP- 14-08 Councilmember Wooden introduced Agenda item No. 6 Mrs. Manwaring noted it's an opportune time to do this as there are a lot of new trends out there for parks . Additionally, the City has accomplished a lot in the past eight years and it will be good to have new guide . Motion by Councilmember Wooden to award a contract to Green Play, LLC in the amount of $49,989 for consultant services to update the Parks and Recreation Master Plan per RFP-14-08; seconded by Councilmember Fitzgerald ; carried 8-0. L Resolution 38-2014-amending the Fiscal Year 2014 General Fund Budget to reflect the approval of a Supplemental Budget Appropriation in the amount of $8,000 for the Installation of Air Conditioning in the Channel 8 equipment room Councilmember Urban introduced Resolution No . 38-2014 . Channel 8, a government access channel, operates 24 hours a day. The continuous use of the equipment necessitates independent temperature control to protect it from overheating and damage . Money for this project will come from the PEG (Public, Educational, and Governmental access) fees that cable users pay . PEG fee funds can only be used for equipment, software and maintenance associated with operating WR1V8. Motion by Councilmember Urban to approve Resolution No. 38-2014 -A resolution amending the fiscal year 2014 general fund budget to reflect the approval of a supplemental budget appropriation in the amount of $8,000 for the installation of air conditioning in the Channel 8 equipment room; seconded by Councilmember Davis; carried 8-0. !L_ Resolution 41-2014-giving notice of and calling for a Special Municipal Election to be held November 4, 2014 Councilmember Pond introduced Resolution No. 41-2014 . City Council Minutes July 14, 2014 Page 11 The City Council will potentially refer a ballot question to Wheat Ridge voters for the November 4 , 2014 general election . Since our municipal elections are held in odd- numbered years , by Charter, a special municipal election must be formally called. Motion by Councilmember Pond to approve Resolution No. 41 -2014, a resolution giving notice of and calling for a special municipal election to be held on November 4 , 2014 ; seconded by Councilmember Langworthy ; carried 8-0. CITY MANAGER'S MATTERS Mr. Goff reminded citizens that a series of community outreach meetings will be coming. The dates are : Wednesday, July 16 , 11 :30-1 :00 at the Rec Center; and 6-7 :30 pm at Colorado Plus; Saturday , July 19 , 10 :11 :30 at Hayward Park (City Hall); Wednesday, July 23, 6-7:30 pm at the Active Adult Center; and Thursday, July 24 , 10 :11 :30 at Anderson Park . CITY ATTORNEY'S MATTERS CITY CLERK'S MATTERS ELECTED OFFICIALS' MATTERS Jerry DiTullio thanked the people who participated in the 4th of July Parade and the Police Department for their support . Bud Starker thanked everyone who came out for the 4th of July Parade , and the folks who came to express their opinion about 38th Avenue. He encouraged people to come to the listening sessions and give their input. Zachary Urban mentioned the community meetings and encouraged folks to come . He extended thanks to those who came and expressed their opinion tonight and to the folks who put together the 4th of July Parade . Kristi Davis thanked the Council folks for all the discussions that happened on the street width designation. They were open and willing to listen to other opin ions . Genevieve Wooden thanked those people who came to express their opinion. She encouraged people to come to the meetings to express their opinions. She thanked organizers of the Garden Tour--especially the owners of the eight gardens on the tour and the sponsors of the event and lunch. -She announced the Wheat Ridge Committee for Educational Excellence will be working on having an educational summit on September 1th at the Rec Center at 6 :30pm . They will be bringing people together City Council M inutes July 14 , 2014 Page 12 to let you know how education is in Wheat Ridge right now and how we 'd like it to be in the future . 18 Wheat Ridge school principals will be there . More information will follow . Tracy Langworthy said she enjoyed the Garden Tour. -She encouraged people to be aware of people in the crosswalks . -She thanked the people who came out and talked tonight. Tim Fitzgerald said he is happy about tonight 's decision on 38t h Avenue . The City Council Meeting adjourned at 10:05 pm . Janelle Shaver, C ity Cle rk APPROVED BY CITY COUNCIL ON July 28 , 2014 BY A VOTE OF __ to __ Kristi Davis , Mayor pro tern The preceding Minutes were prepared according to §47 of Robert 's Rules of Order, i.e . they contain a record of what was done at the meeting , not what was said by the members. Recordings and DVD 's of the meetings are available for listening or view i ng in the City Clerk 's Office , as well as copies of Ordinances and Resolutions . ESTIP and BDZ Ordinance Amendments July 28 , 2014 Page2 BACKGROUND: In 2002 , the Wheat Ridge Code of Laws established the ESTIP , as defined in chapter 22 , division 5 , section 22-73. The BDZ was established at the same time under the same chapter, division 5 , section 22-85 . The goal ofboth programs is to provide incentives that will encourage the development of private sector jobs, revitalize deteriorating areas of the City, increase sales tax revenues , provide new or enhanced public improvements , and encourage the development, redevelopment and expansion of businesses within the City. ESTIP provides an incentive for new business development or the expansion of existing sales tax producing businesses. The ESTIP rebates a portion or all of the sales tax increment generated by a specific project for a specified period of time with a maximum amount that can be rebated. Increment is defined as sales tax revenues generated over a base level. The base level is calculated by using the previous 12 months of sales tax generation at that specific property. Any sales tax above that defined base level is considered the increment and can be rebated back to the business. The BDZ program authorized a tool which allows the City Council to waive certain building permit fees and building use taxes in association with new construction or rehabilitation projects throughout the City. As both programs are utili z ed to a greater degree, staff has identified some areas of the code that require amendments to improve the operations of the programs. In addition , City Council has requested specific changes to both programs to provide more definition regarding the requirements for receiving abatement or sharing of eligible fees , charges and taxes. The primary proposed amendments to both programs include: • The current ESTIP requires enhanced sales taxes of at least $5 ,000 before a project would be eligible for the program . Council direction was received to increase this minimum threshold to $10,000. • Both programs reference an "application " requirement. Neither program has a formal application and requires only a request to the City's economic development division or City Manager 's Office to initiate the process. Staff recommends that all references to "application" be changed to "agreement". • Both programs reference "the one percent of sales and use tax earmarked for the capital improvement fund ." This eannark no longer exists and staff recommends that these sections be deleted . • BDZ approvals shall be based upon the capital expenditure by the requesting party. A minimum of $250,000 in private investment into the project must be made to be eligible for the program. For investments between $250,000 and $499 ,999 a project is eligible for a rebate of up to 25 % of eligible city fees , charges and taxes ; 50% for investments of $500 ,000 to $999 ,999; and 75 % for investments of $1 ,000 ,000 or higher. ESTIP and BDZ Ordinance Amendments July 28 ,2014 Page 3 RECOMMENDED MOTION: "I move to approve Council Bill No. 07-2014, an ordinance concerning economic development, and in connection therewith , amending the Enhanced Sales Tax Incentive Program and Business Development Zone program within the City, on first reading, order it published , public hearing set for Monday, August 11 ,2014 at 7:00p.m. in City Council Chambers , and that it take effect 15 days after final publication . Or, "I move to postpone indefinitely Council Bill No. 07-2014 , an ordinance concerning economic development, and in connection therewith , amending the Enhanced Sales Tax Incentive Program and Business Development Zone program within the City, for the following reason(s) " REPORT PREPARED BY; Gerald Dahl , City Attorney Steve Art, Economic Development Manager Patrick Goff, City Manager ATTACHMENTS: 1. Council Bill No . 07-2014 CITY OF WHEAT RIDGE, COLORADO INTRODUCED BY COUNCIL MEMBER ___ _ COUNCIL BILL NO. I ORDINANCE NO. ___ _ Series 2014 TITLE: AN ORDINANCE CONCERNING ECONOMIC DEVELOPMENT, AND IN CONNECTION THEREWITH, AMENDING THE ENHANCED SALES TAX INCENTIVE PROGRAM (ESTIP) AND BUSINESS DEVELOPMENT ZONE (BDZ) PROGRAM WITHIN THE CITY WHEREAS, the City of Wheat Ridge is a home rule municipality operating under a charter approved by the electorate pursuant to Article XX of the Colorado Constitution; and WHEREAS, the Wheat Ridge City Council, in the exercise of its power to adopt ordinances for the general welfare of the City, has previously adopted Divisions 4 and 5 of Article 1 of Title 22 of the Wheat Ridge Code of Laws, specifically, the "Enhanced Sales Tax Incentive Program," and the "Business Development Zone Program," and WHEREAS, the City Council finds that the two programs have served a valuable public purpose in attracting new and revitalized businesses to the City; and WHEREAS, in order to improve the operation of the Programs and to eliminate internal inconsistencies between them, the Council finds that the Code of Laws provisions governing the Programs should be amended. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE, COLORADO: Section 1. Enhanced Sales Tax Incentive Program Amended: Division 4 of Article I of Title 22 of the Wheat Ridge Code of Laws, entitled "Enhanced Sales Tax Incentive Program," is hereby amended to read: Sec. 22-73. Program established. There is hereby established within the city an enhanced sales tax incentive program. Sec. 22-74. Purpose. The purpose of the enhanced sales tax incentive program created by this division is to encourage the establishment and/or substantial expansion of retail sales tax generating businesses within the city, thereby stimulating the economy of and within the city, thereby providing employment for residents of the city and others, thereby further expanding the goods available for purchase and Attachment 1 consumption by residents of the city, and further increasing the sales taxes collected by the city, which increased sales tax collections will enable the city to provide expanded and improved municipal services to and for the benefit of the residents of the city, while at the same time providing public or public-related improvements at no cost, or at deferred cost, to the city and its taxpayers and residents. Sec. 22-75. Definitions. The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Enhanced sales tax shall mean the amount of sales tax collected by the city over and above a base amount negotiated by, and agreed upon by, the applicant and the city, and which amount is approved by the city council, which base amount shall never be lower than the amount of sales taxes collected by the city at the property in question in the previous twelve (12) months plus a reasonable and agreed upon percentage of anticipated increase in sales taxes, or, in the case of a newly established business, an amount which represents the good faith determination by the applicant and the city as to the amount of sales taxes which could be generated from the new business without the participation by applicant in the ESTIP created under this division. ESTIP means the enhanced sales tax incentive program created under this division. Owner or proprietor shall mean the record owner or operator of an individual business, or, in the case of a shopping center, the owner of the real property upon which more than one (1) business is operated, provided that the owner (whether an individual, corporation, partnership or other entity) is the owner or lessor of the individual businesses operated thereon. Sec. 22-76. Participation. Participation in ESTIP shall be based upon approval by the city council exercising its legislative discretion in good faith. Any owner or proprietor of a newly established or proposed retail sales tax generating business or location, or the owner or proprietor of an existing retail sales tax generating business or location which wishes to expand substantially, may apply to the city for inclusion within the ESTIP provided that the new or expanded business is reasonably likely, IN THE COUNCIL'S JUDGMENT, to generate enhanced sales taxes of at least five thousand dollars ($5,000.00) TEN THOUSAND DOLLARS ($10,000) in the first year of operation. 12 MONTHS FOLLOWING THE APPROVAL OF AN AGREEMENT. Sec. 22-77. Approval of agreement; use of funds generally. Approval by the city council of an agreement implementing this ESTIP shall entitle the successful applicant to share in enhanced sales taxes derived from applicant's property or business in an amount which shall not in any event exceed the enhanced sales taxes; provided, however, tRat THE applicant may use such amounts only for public and/or public-related purposes such as those specified herein and which are expressly approved by the city council at the time of consideration of the application. The time period in which the enhanced sales taxes may be shared shall not commence until all public or public-related improvements are completed, and shall be limited by the city council, in its discretion, to a specified time, or until a specified amount is reached. Sec. 22-78. ELIGIBLE Uses enumerated. The uses to which the shared enhanced sales taxes may be put by an applicant shall be strictly limited to those which are public or public-related in nature. For the purposes of this division, public or public-related purposes shall mean public improvements, including but not limited to streets, sidewalks, curbs, gutters, pedestrian malls, street lights, drainage facilities, landscaping, decorative structures, FACADES, statuaries, fountains, identification signs, traffic safety devices, bicycle paths, off-street parking facilities, benches, restrooms, information booths, public meeting facilities, and all necessary, incidental, and appurtenant structures and improvements, together with the relocation and improvement of existing utility lines, and any other improvements of a similar nature which are specifically approved by the city council upon the city council's finding that said improvementS are public or public-related improvements, and that such improvements shall enhance the competitive position of the applicant within the Denver metropolitan area marketplace. Sec. 22-79. Increments, sharing of funds. The base figure for sales taxes shall be divided into twelve (12) monthly increments, which increments are subject to agreement between the parties, and approval by the city council, and which increments shall be reasonably related to the average monthly performance of the business or property in question, or similar businesses in the area (i.e. adjust for seasonal variations). If in any month the agreed upon figure is not meet by THE applicant so as to create enhanced sales tax for that month, no funds shall be shared with THE applicant for that month, and no increment shall be shared until that deficit, and any other cumulative deficit, has been met, so that at the end of any twelve-month cycle, NO funds HAVED BEEN SHARED in excess of THE AGREED enhanced sales taxes. agreed to be shared shall not ha•t'e been shared with any applicant. Sec. 22-80. Revenues restricted. It is an overriding consideration and determination of the city council that existing sources of city sales tax revenues shall not be used , impaired, or otherwise affected by this ESTIP enhanced sales tax incentive program. Therefore, it is hereby conclusively determined that only enhanced sales taxes generated by the properties described in an application shall be subject to division under this ESTIP. It shall be the affirmative duty of the treasurer SALES TAX DIVISION to collect and hold all such enhanced sales taxes in a separate account apart from the sales taxes generated by and collected from the other sales tax generating uses and businesses within the city and to provide an accounting system which accomplishes the overriding purpose of this section. t.t is conclusively stated by tThe city council FINDS AND DECLARES that this division would not be adopted or implemented but for the provisions of this section. Sec. 22 81. Capital improvement fund. The one ( 1) percent of sales and use taxes earmarked for the capital improvement fund may be utilized in this ESTIP for public impro't'ements so long as the same are within the meaning of the phrase capital improvements as defined in the voter approved sales tax referendum previously held 'Nithin the city, and provided that the same are found and determined by the city council to be capital improvements which could be provided by the city from the capital improvement fund but for the provision of such improvements by the applicant; provided, however, that such use of capital improvement funds as part of this ESTIP shall be limited to the amount agreed pursuant to section 22 83 hereof; provided further, however, that nothing contained herein shall limit the city council in the determination to appropriate additional capital improvement funds for capital improvements affecting the property in question as a part of the city's regular appropriation and budget process. Sec. 22-821. Criteria for approval of application AGREEMENT. Approval of an application ESTIP AGREEMENT for inclusion in this ESTIP shall be given by the city council, at a public hearing, held as a portion of a regularly scheduled city council meeting. NOTICE OF WHICH HAS BEEN PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION AT LEAST SEVEN (7) DAYS PRIOR TO THE HEARING. THE COUNCIL'S DETERMINATION OF THE AMOUNT OF SALES TAX TO BE SHARED SHALL BE BASED UPON THE IDENTIFIED NEED OR VALUE THE BUSINESS OFFERS TO THE COMMUNITY IN TERMS OF SALES TAX GENERATION, INVESTMENT IN THE COMMUNITY OR INCREASED EMPLOYMENT based upon the following criteria: ( 1) The amount of enhanced sales taxes which are reasonably to be anticipated to be derived by the city through the expanded or new retail sales tax generating business; (2) The public benefits which are provided by the applicant through public works, public improvements, additional employment for city residents, etc.; (3) The amount of expenditures which may be deferred by the city based upon public improvements to be completed by the applicant; ( 4) The conformance of the applicant's property or project with the comprehensive plan and zoning ordinances of the city; (5) The agreement required by section 22-~2 having been reached, which agreement shall contain and conform to all requirements of section 22 83. (6) Appro'lal shall be by motion adopted by a majority of the entire city council. Sec. 22-832. Agreement required. A) Each application for approval AGREEMENT submitted to the city council shall be subject to approval by the council solely on its own merits. Approval of an application shall require that an THE APPROVED agreement SHALL be executed by the owner and the city, AND which agreement shall, at a minimum, contain: (1) A list of those public or public-related improvements which justify applicant's approval, and the amount which shall be spent on such improvements; (2) The maximum amount of enhanced sales taxes to be shared, and the maximum time during which the agreement shall continue, it being expressly understood that any such agreement shall expire and be of no further force and effect upon the occurrence of the earlier to be reached of the maximum time of the agreement (whether or not the maximum amount to be shared has been reached) or the maximum amount to be shared (whether or not the maximum time set forth has expired); (3) A statement that THE AGREEMENT tffis is a personal agreement which is not transferable and which does not run with the land; (4) That THE tffis agreement shall never constitute a debt or obligation of the city within any constitutional or statutory provision; (5) The base amount which is agreed upon by month, and the fact that if, in any month as specified, sales taxes received from the property do not at least equal such amount, that there shall be no sharing of funds for such month; (6) The base amount shall be agreed upon which shall consider the historic level of sales at the property in question, or a similar property within the area in the event of a new business, and a reasonable allowance for increased sales due to the improvements and upgrades completed as a result of inclusion within this program; (7) A provision that any enhanced sales taxes subject to sharing shall be escrowed in the event there is a legal challenge to this enhanced sales tax incentive program or the approval of any application therefor; (8) An affirmative statement that the obligations, benefits, and/or provisions of this agreement may not be assigned in whole or in any part without the expressed authorization of the city council, and further that no third party shall be entitled to rely upon or enforce any provision hereof; (9) Any other provisions agreed upon by the parties and approved by the city council. B) APPROVAL SHALL BE BY MOTION ADOPTED BY A MAJORITY OF THE ENTIRE CITY COUNCIL. Sec. 22-843. NO Jjoint ventureR; liability. The city council has enacted this ESTIP as a joint benefit to the public at large and to private owners for the purposes of providing the city with increased sales tax revenues generated upon and by properties improved as a result of this program; public improvements being completed by private owners through no debt obligation being incurred on the part of the city, and allowing applicants an opportunity to improve properties which generate sales activities, which improvements make those properties more competitive in the marketplace and further provide to the applicant additional contingent sources of revenues for upgrading such properties. The city council specifically finds and determines that creation of this ESTIP is consistent with the city's powers as a home rule municipal corporation, and that exercise of such powers in the manner set forth herein is in furtherance of the public health, safety and welfare . Notwithstanding any provision hereof, BY ADOPTING THIS PROGRAM AND APPROVING AGREEMENTS UNDER THE SAME , the city shall never be a joint ventureR in any private entity or activity which participates in this ESTIP and the city shall never be liable or responsible for any debt or obligation of any participant in ESTIP. Section 2. Business Development Zone Program Amended. Division 5 of Article I of Title 22 of the Wheat Ridge Code of Laws is amended to read: Sec. 22-85. Program established. There is hereby established within the city the "Wheat Ridge Business Development Zone" program. Sec. 22-86. Legislative declarations. (a) The city council of the city hereby finds and declares: (1) That the health, safety and welfare of the people of this city are in large part dependent upon the continued encouragement, development and expansion of opportunities for employment in the private sector in this city; (2) That there currently exists in this city businesses or vacant land which require new development or revitalization opportunities to overcome conditions of unemployment, underemployment, net out-migration of the population, diminution of tax revenues, chronic economic distress and blighting influences such as, but not limited to, deterioration of business districts, deterioration of public infrastructures, traffic and drainage problems or sudden severe economic dislocations; (3) That by creating new development, redevelopment or expansion opportunities for businesses within the city the city council will increase the likelihood that new and improved businesses will generate more municipal sales and use tax revenues for the city in the future. (b) It is therefore declared to be the policy of the city, in order to provide incentives for private enterprises to expand or for new businesses to locate in the city, to develop a program which empowers the city council to designate portions of the city as a "business development zone" and to provide for the abatement of certain categories of fees, taxes and other business development-related charges for new development or redevelopment within such districts. (c) The city council has enacted this division 5 of article I of chapter 22 of the Code of Laws as a joint benefit to the public at large and to private owners for the purposes of reducing blight in our business districts and of providing the city with increased sales and use tax revenues generated upon and by properties improved as a result of this program and allowing owners and proprietors opportunities to improve properties which generate sales activities AND CREATE ADDITIONAL EMPLOYMENT OPPORTUNITIES, which improvements make those properties more competitive in the marketplace and further provide to owners and proprietors additional contingent sources of revenues for tJ.RUPgrading such properties. (d) The city council specifically finds and determines that creation of this "business development zone" division and the exercise of the powers enumerated herein are consistent with and promotes the public health, safety and general welfare of the citizens of Wheat Ridge . Sec. 22-87. Definitions. As used in this division , the following phrases shall have the following meanings unless the context clearly indicates another meaning: ( 1) The phrase eligible city fees , charges and taxes shall mean and shall be limited to use tax on furniture and fixtures associated with the initial development or redevelopment "project ," use tax on building materials , building permit fees and zoning fees . (2) The phrase expected incremental future sales and use tax revenue shall mean the amount of the additional sales and use tax revenue , as projected by the city , expected to be generated during the council-designated time period from the time of completion of the "project" over and above the sales and use tax fees generated on the premises in the twelve (12) months preceding the application described in section 22-88. (3) The phrase owner or proprietor shall mean the record owner, tenant or operator of an individual business or, in the case of a shopping center, the owner of the rea l property upon which more than one business is operated . ( 4) Project shall mean the specific development or redevelopment expenditures which relate both to the abatement of "eligible city fees , charges , and taxes" and "expected incremental future sales and use tax revenues ." Sec. 22-88. Participation. Participation in the bus i ness development zone program shall be based upon approval by the city council , exercising its legislative discretion in good f.attR . Any owner or proprietor of an established , proposed or newly purchased business , or the owner or proprietor of an existing business which wishes to expand AND INVEST AT LEAST $250,000 IN PRIVATE IMPROVEMENTS IN THE PROJECT, may apply to the city for inclusion within the program. Abatement or sharing of eligible city fees , charges, and taxes shall , upon approval of the application AGREEMENT by the city council , be granted up to the amount of expected incremental future sales and use tax revenue to be generated by the project during the agreed to time period ACCORDING TO THE FOLLOWING REBATE SCHEDULE: Amount of Investment in Project Eligible City Fees, Charges and Taxes Rebate $250 ,000 to $499 ,999 25% $500 ,000 to $999,999 50% $1 ,000 ,000 or higher 75% Sec. 22-89. Approval of agreement; use of funds generally. Approval by the city council of an agreement implementing the prov isions of this division shall entitle the applicant to share in the eligible city fees , charges and taxes up to the amount agreed by the city council ; provided , however, that applicant may use such amounts only for the purpose of developing or redeveloping the business within the approved business development zone , which purposes shall be specifically enumerated in the agreement provided for in section 22-942 hereof. Sec. 22-90. Uses enumerated. The uses to which the eligible city fees, charges and taxes may be put by an applicant shall be strictly limited to those which are approved by the city council and relate directly to the development or redevelopment of businesses within the city , which developed or redeveloped businesses will generate more municipal sales and use tax revenues for the city in the future. Priority shall be given to aU businesses which make application for inclusion within this program aR6 who agree to utilize the eligible city fees , charges and taxes for the public or public-related purposes identified section 22-78 of this Code of Laws . Sec. 22 91. Increments, sharing of funds. The base figure for eligible city fees , charges and taxes shall be divided into twelve (12) monthly increments , which increments are subject to agreement between the parties and approved by the city council, and which increments shall be reasonably related to the amount of sales and use taxes generated on the premises in the twelve (12) months preceding the application received by the city for participation in this program. The accounting and payment provisions of sections 22 79 and 22 80 hereof are hereby declared to be applicable to any application approved hereunder. Sec. 22 92. Capital improvement fund. The one (1) percent of use taxes earmarked for the capital impro't'ement fund may be utilized in this business development zone program for public improvements so long as the same are within the meaning of the phrase capital improvements as defined in the voter appro\'ed sales tax referendum previously held within the city , and provided the public improvements are found and determined by the city council to be capital improvements which could be provided by the city from the capital improvement fund but for the provision of such improvements by the applicant. Sec. 22-931. Criteria for approval of AGREEMENT application. (a) Approval of A BDZ AGREEMENT an application for inclusion in this business development zone program shall be given by the city council , at a public hearing held as a portion of a regularly scheduled city council meeting , NOTICE OF WHICH HAS BEEN PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION AT LEAST SEVEN (7) DAYS PRIOR TO THE HEARING. THE COUNCIL 'S APPROVAL OF A BDZ AGREEMENT SHALL BE BASED UPON THE IDENTIFIED NEED OR VALUE THE BUSINESS OFFERS TO THE COMMUNITY IN TERMS OF SALES AND USE TAX GENERATION , INVESTMENT IN THE COMMUNITY OR INCREASED EMPLOYMENT based upon the following criteria : (1) The amount of expected incremental future sales and use tax revenue which can reasonably be anticipated to be derived by the city through the expanded or new tax generating business ; (2) The public benefits which are provided by the applicant through public works, public improvements , additional employment for city residents , etc.; (3) The amount , if any , of city expenditures which may be deferred based upon public improvements to be completed by the applicant ; ( 4) The conformance of the applicant's property or project with the comprehensive plan and zoning ordinances of the city; (5) The agreement required by section 22-942 hereof having been reached, which agreement shall contain and conform to all of the requirements of such section. (b) Approval of any application AGREEMENT shall be made by motion adopted by a majority of the entire city council. (c) The city council may by three fourths (%) majority vote approve exceptions to the provisions of this division when such exceptions are found to be in the public's interest and such exceptions provide substantial benefit to the city. Sec. 22-942. Agreement required. Each application AGREEMENT for appro•lal to the city council shall be subject to approval by the council solely on its own merits. Approval of one application AGREEMENT shall not require, or be deemed precedent for, approval of any other application AGREEMENT. Approval of an application AGREEMENTS shall require that an agreement be executed by the owner and the city, AND wffi6R THE agreement shall, at a minimum contain: ( 1) A list of those public or public related improvements which justify applicant's approval, and the amount which shall be spenaT on such improvements; (2) The maximum amount of expected incremental future sales and use tax revenue; and the maximum time during which the agreement shall continue, it being expressly understood that any such agreement shall expire and be of no further force and effect upon the occurrence of the earlier to be reached of the maximum time of the agreement (whether or not the maximum amount to be shared has been reached) or the maximum amount to be shared (whether or not the maximum time set forth has expired); (3) A statement that this is a personal agreement which is not transferable and which does not run with the land; ( 4) A STATEMENT +that this agreement shall never constitute a debt or obligation of the city within any constitutional or statutory provision; (5) The base amount which is agreed upon by month, and the fact that if, in any month as specified, expected incremental future sales and use tax revenue received from the property does not at least equal such amount , that there shall be no sharing of funds for such month; (6) The base amount shall be agreed upon, which shall consider the use taxes generated by the property in question , or a similar property within the city in the event of a new business; (7) A pro't'ision tThat any expected incremental future sales and use tax revenue shall be escrowed in the event there is a legal challenge to this business development zone program ; (8) An affirmative statement that the obligations, benefits and/or provisions of this agreement may not be assigned in whole or in any part without the expressed authorization of the city council, and further that no third party shall be entitled to rely upon or enforce any provision hereof; (9) Any other provisions agreed upon by the parties and approved by the city council. Sec. 22-963. NO Jjoint ventureR liability. The city council has enacted this business development zone as a joint benefit to the public at large and to private owners for the purposes of providing the city with increased tax revenues generated upon and by properties improved as a result of this program ; public improvements being completed by private owners through no debt obligation being incurred on the part of the city , and allowing applicants an opportunity to improve properties which generate sales and other business activities. The city council specifically finds and determines that creation of this business development zone is consistent \'lith the city's powers as a home rule municipal corporation , and that exercise of such pmvers in the manner set forth herein is in furtherance of the public health , safety and welfare. Notwithstanding any provision hereof, the city shall never be a joint ventureR in any private entity or activity which participates in this business development zone program , and the city shall never be liable or responsible for any debt or obligation of any participant in this business development zone . Sec. 22-964. ESTIP and TIF. If the applicant , owner or proprietor participates in the city's Enhanced Sales Tax Incentive Program ("ESTIP") or if the owner's or proprietor's business is located in an urban renewal area in which all or a portion of sales tax revenues have been pledged as part of a tax increment financing program , he or she shall be ineligible for participation in this business development zone program. Sees. 22-975-22-997. Reserved. Section 3. Severability, Conflicting Ordinances Repealed. If any section , subsection or clause of this Ordinance shall be deemed to be unconstitutional or otherwise invalid , the validity of the remaining sections , subsections and clauses shall not be affected thereby. All other ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. Section 4. Effective Date. This Ordinance shall take effect fifteen (15) days after final publication , as prov ided by Section 5.11 of the Charter. INTRODUCED, READ , AND ADOPTED on first reading by a vote of _ to _ on this 28th day of July, 2014 , ordered published in full in a newspaper of general circulation in the City of Wheat Ridge , and Public Hearing and consideration on final passage set for August 11 , 2014 at 7:00p.m ., in the Council Chambers , 7500 West 291h Avenue , Wheat Ridge , Colorado. READ , ADOPTED AND ORDERED PUBLISHED on second and final reading by a vote of _ to _, this day of , 2014. SIGNED by the Mayor on this __ day of _____ , 2014. ATIEST: Janelle Shaver, City Clerk First Publication : Second Publication: Wheat Ridge Transcript Effective Date : Published : Joyce Jay, Mayor Approved as to Form Gerald E. Dahl , City Attorney Wheat Ridge Transcript and www.ci.wheatridge.co.us ~~·., -~ City of ypr WheatR.i9ge ITEMNO:_d_ DATE: July 28 , 2014 REQUEST FOR CITY COUNCIL ACTION TITLE: MOTION TO ACCEPT THE 2013 COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FROM SWANHORST & COMPANY, LLC 0 PUBLIC HEARING cg) BIDS /MOTIONS 0 RESOLUTIONS 0 ORDINANCES FOR 1 sr READING 0 ORDINANCES FOR 2 ° READING QUASI-JUDICIAL: D YES EXECUTIVE SUMMARY: Section 10.15 of the Municipal Charter for the City of Wheat Ridge require s that an independent audit be performed annually of all City accounts. The CPA firm of Swanhorst & Company, LLC performed the audit of the City 's financial statements for the year ended December 31 , 2013. A representative from Swanhorst & Company will be at the July 28 , 2014 City Council meeting to present the 2013 CAFR to Council for acceptance. The 2013 City audit included the regular audit and a single audit. A single audit is required when the City receives grant funding totaling $500 ,000 or more. As reported in the attached management letter from Swanhorst & Company, the following conclusions were reached from the audit: 1. "We noted no transactions entered into by the City during the year that were both significant and unusual , and of which , under professional standards , we are required to inform you , or transactions for which there is a lack of authoritative guidance or consensus." Council Action Fonn-CAFR July 28, 2014 Page 2 2. "We evaluated the key factors and assumptions used to develop the estimates in detennining that they are reasonable in relation to the financial statements taken as a whole." 3. "We provided management with a schedule of audit adjustments. The most significant misstatements related to the activities of the Wheat Ridge Urban Renewal Authority. In addition, the City received significant revenues from sales tax audits that were accrued and reported in 2013." 4. "We are pleased to report that no such disagreements [with management] arose during the course ofthe audit." 5. "We encountered no significant difficulties while perfonning our audit." ISSUE: For the year ended December 31, 2013, the auditors have made the following recommendations: I . Investments -"As mentioned in past years, the City continues to purchase certificates of deposit at banks not certified under the Public Deposit Protection Act (PDPA), a requirement of sta te statutes. In addition , during 2013 , the City purchased an investment security not allowed by state statutes or the City's investment policy. We again recommend that the City evaluate the risks involved with the certificates of deposit. In addition , the City should monitor compliance with applicable laws and policies when purchasing investments." In regard to the purchase of negotiable certificates of deposit not certified under PDPA , this is an audit comment that -vve have seen .in the past years and the City Treasurer has received a legal opinionfrom •the lCity Attorney on this. !natter. The City Attorney has indicated that negotiable c e rt(ficat~; of deposit are per:rzitteJ' under CRS 24-75-601.1 and are covered by FDIC Additionally, in respect to the investment security purchased in 2013 , the City Treasurer is proposing changes to the City's Investment Policy which wi ll allow for these types of investments. 2. Federal Awards -"The City has historically maintained the accounting records for federal awards using manual spreadsheets prepared by the grant administrators or accounting personnel. We continue to identify small errors in the spreadsheets. We again recommend the City centralize its grant accounting process using the established accounting system. This process will help to detect and correct errors through the internal controls already in place." The Finance Division has been working with the Purchasing Division to establish a more formal grant program process. This process is under development and will be in place by the first quarter of 2015. 3. Compliance with Federal Regulations -"The City receives various federal awards that require compliance with specified federal regulations. We identified noncompliance with the Davis-Bacon Act, which requires the City to monitor wages paid to laborers and mechanics employed by its construction contractors. When the City receives federal awards, internal controls should be established to ensure compliance with applicable federal regulations." Staff has put into place internal controls to ensure that the necessary documentation required for wage compliance is accurate and complete. Council Action Form -CAFR July 28, 2014 Page 3 4. Internal Controls -"As mentioned last year, the City has not established a review and approval process for journal entries. There is an increased risk that errors or fraud would not be detected in a timely manner when proper segregation of duties does not exist. We again recommend that the City implement additional oversight in the journal entry process." Beginning this month , staff has implemented a new protocol that includes the Assistant to the City Manager or the Administrative Services Director reviewing and signing off on journal entries prepared by th e Accounting Sup ervisor. Documentation of thes e reports will be .filed for audit purposes. FINANCIAL IMPACT: The contract for audit services with Swanhorst & Company, LLC is for an amount of $26,500 for the regular audit in addition to the single audit. RECOMMENDED MOTION: "I move to accept the 2013 Comprehensive Annual Financial Report from Swanhorst & Company, LLC." Or, "I move to postpone indefinitely the acceptance of the 2013 Comprehensive Annual Financial Report from Swanhorst & Company, LLC for the following reason(s) " REPORT PREPARED AND REVIEWED BY: Linda Stengel , Accounting Supervisor Nathan Mosley, Assistant to the City Manager Heather Geyer, Administrative Services Director Patrick Goff, City Manager ATTACHMENTS: 1. 2013 CAFR CITY OF WHEAT RIDGE, COLORADO FINANCIAL STATEMENTS December 31 ,2013 TABLE OF CONTENTS INTRODUCTORY SECTION Directory of City Officials FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements Statement of Net Position Statement of Activities Balance Sheet -Governmental Funds Reconciliation of the Balance Sheet of Goverrunental Funds to the Statement of Net Position Statement of Revenues , Expenditures and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Notes to Financial Statements Required Supplementary Information Budgetary Comparison Schedule-General Fund Notes to Required Supplementary Information Supplementary Information Combining Balance Sheet -Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Budgetary Comparison Schedule-Open Space Fund Budgetary Comparison Schedule-Police Investigation Fund Budgetary Comparison Schedule -Municipal Court Fund Budgetary Comparison Schedule -Conservation Trust Fund PAGE I-IX 2 3 4 5 6 7-17 18 19 20 21 22 23 24 25 INTRODUCTORY SECTION CITY OF WHEAT RIDGE, COLORADO CITY OFFICIALS December 3 I , 20 13 MAYOR Joyce Jay CITY COUNCIL District 1 William Starker Jerry DiTullio CITY CLERK MUNICIPAL JUDGE CITY TREASURER CITY ATTORNEY CITY MANAGER ACCOUNTING SUPERVISOR District 2 Zachary Urban Kristi Davis DIRECTOR OF ADMINISTRATIVE SERVICES DIRECTOR OF COMMUNITY DEVELOPMENT DIRECTOR OF PARKS & RECR EATI O N DIRECTOR OF PUBLIC WORKS CHIEF OF POLICE HUMAN RESOURCE MANAGER PURCHASI NG AND CONTRACTING AGENT District 3 George Pond Tim Fitzgerald Janelle Shaver Christopher Randall Larry Schulz Gerald Dahl Patrick Goff Linda Stengel Heather Geyer Kenneth Johnstone Joyce Manwaring Scott Brink Daniel G. Brennan Tamera Dixon Jennifer Nellis District 4 Genevieve Wooden Tracy Langworthy FINANCIAL SECTION --+-8~&C Swanhorst & Company LLC Certi fi ed Publ ic Account.1nts Honorable Mayor and Members of the City Council City of Wheat Ridge Wheat Ridge, Colorado INDEPENDENT AUDITORS' REPORT Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the discretely presented component unit, each major fund , and the aggregate remaining fund information of the City of Wheat Ridge as of and for the year ended December 31 , 2013 , and the related notes to the financial statements, which collectively comprise the basic financial statements of the City of Wheat Ridge, as listed in the table of contents. Ma11agement's Respo11sibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America ; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error . Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors ' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the propose of expressing an opinion on the effectiveness of the internal control. Accordingly , we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinio11s In our opinion, the financial statements referred to above present fairly , in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Wheat Ridge as c,f December 31, 2013 , and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. 8400 E. Crescent Parkway o Suite 600 o Greenwood Village , CO 80111 o (720) 528-4306 Fax: (720) 528-4307 Other Matters (Required Supplementary Information) Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Matters (Other Information) Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the CityofWheatRidge's basic financial statements. The supplementary information and the local highway finance report listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling the information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 21, 2014, on our consideration of the City of Wheat Ridge's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over fmancial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Wheat Ridge's internal control over financial reporting and compliance. ~~Ut- July 21,2014 Management's Discussion and Analysis As management of the City of Wheat Ridge , we offer this narrative overview and analysis of the financial activities of the City of Wheat Ridge for the fiscal year ended December 31, 2013. Please read it in conjunction with the City·s financial statements, which follow this section. Financial Highlights • The assets of the City of Wheat Ridge exceeded its liabilities at the close of fiscal yea r 2013 by $77 million (net position). Of this amount, $15 million (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. • At the close of fiscal year 2013, the City of Wheat Ridge 's governmental funds reported combined ending fund balances of $17 million. a decrease of $152,000 in comparison with the prior year. Approximately 44%, $8 million , is available for spending at the government's discretion (unrestricted, unassigned fund balance). • At the end of the fiscal year 2013. unrestricted , unassigned fund balance for the General Fund was $8 million, or 30% of total General Fund expenditures. • General Fund actual revenues were $203, 197 more than final budgeted revenue for the fiscal year 20 13 and actual expenditures were $2,322,682 less than final budgeted expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Wheat Ridge's basic financial statements. The basic financial statements comprise three components: I) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements report information on all activities of the City and its component unit (Wheat Ridge Urban Renewal Authority). The statement of net position includes all of the City's assets and liabilities . All of the current year·s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The statement of net position presents information on all of the City of Wheat Ridge 's assets and liabilities, with the difference between the two reported as net position . Over time , increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Wheat Ridge is improving or deteriorating. The statement of activities presents information showing how the City of Wheat Ridge· s net position changed during fiscal year 2013. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses reported in this statement for some items will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The government-wide financial statements include not only the City itself, but also the legally separate Wheat Ridge Urban Renewal Authority for which the City is financially accountable. The governmental activities of the City include general government, community development, police , public works , and parks and recreation. Fund financial statements. The fund financial statements provide more detailed information about the City 's most significant funds -not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for particular purposes. • Some funds are required by State law. • The City Council establishes other funds to control and manage money for particular purposes (like the Recreation Center Operating Fund) or to show that it is properly using certain taxes and grants (like the Conservation Trust Fund). The City has one type of fund: Governmental funds-All of the City 's basic services are included in governmental funds , which focus on (I) how cash and other financial assets can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps determine whether or not there are more or fewer financial resources that can be spent in the near future to finance the City 's programs . Because this information does not encompass the additional long-term focus ofthe government-wide statements, additional information at the bottom of the governmental funds statement, or on the subsequent page , is provided to explain the relationship (or differences) between them. Financial Analysis of the City as a Whole Net position. As noted earlier, net position may serve over time as a useful indicator of a government 's financial position. In the case of the City of Wheat Ridge , assets exceeded liabilities by $76,808 ,385 at the close of the 2013 fiscal year. By far the largest portion of the City of Wheat Ridge 's net position (77%) reflects its investment in capital assets (e.g., land , buildings , machinery , and equipment). The City of Wheat Ridge uses these capital assets to provide services to citizens ; consequently, these assets are not available for future spending. An additional portion of the City of Wheat Ridge 's net position ( 4%) represents resources that are subject to external restrictions on how they may be used (open space and parks , police investigations , crime prevention activities , government access channel and emergency reserves). The remaining balance of unrestricted net position ($14 ,653 ,603 ) may be used to meet the City 's obligations to citizens and creditors. II At the end of the current fiscal year, the City of Wheat Ridge is able to report positive balances in net position for the City as a whole . The same situation held true for the prior fiscal year. City of Wheat Ridge Net Position Current and other assets capital assets Total assets Long-term liabilities outstanding Other liabilities Total liabilities Deferred lnflo'NS of Resources Net Position : Net Investment in Capital Assets Restricted Unrestricted Total net position Changes in Net Position Governmental activities. Governmental Activities 2013 2012 $21 ,385,252 $19 ,397 ,036 $58 ,898 ,997 $55,571 ,000 $80,284 ,249 $74,968 ,036 $1 ,080 ,680 $1 ,026 ,408 $1 ,643 ,295 $1 ,339 ,994 $2,723,975 $2,366,402 $751 ,889 $742 ,532 $58 ,898 ,997 $3 ,255 ,785 $14,653,603 $76 ,808,385 $55 ,571 ,000 $2 ,734,020 $13 ,554 ,082 $71,859 ,102 • Governmental Act ivities increased the City"s total net position by $5 million . Capital assets increased by $3 million primarily due to construction projects in progress such as the 32nd A venue and Youngfield widening project , Kipling Pedestrian Trail , Hopper Hollow Park , Youngfield Restroom improvements. and the 29 1h Avenue Drainage improvement project. • Restricted net position increased by approximately 19% in 2013. This increase is primarily due to a decrease in expenditures in both the Open Space Fund and Conservation Trust Fund due to the timing of the construction of Hopper Hollow Park . Additionally , 2012 funds were re-encumbered in 2013 in the Open Space. Conservation Trust , and Capital Projects budgets. • Unrestricted net position increased by 8% in 2013 as a result of decreased expenditures and moderate revenue growth. Ill City of Wheat Ridge Changes in Net Position Governmental Activities 2013 2012 Revenues Program Revenues Charges for services $5,001,479 $4 ,488,067 Operating grants and contributions $2,002,724 $2,324 ,670 Captial grants and contributions $6 ,268 ,480 $2,980 ,464 General Revenues Property taxes $736 ,015 $731,234 Sales taxes $18 ,209,871 $15,480 ,177 Use taxes $2,658 ,316 $2 ,599 ,445 Franchise taxes $1,685,102 $1,566,256 Other taxes $1,620,216 $1,469 ,556 Investment earnings $82 ,783 $130 ,653 Miscellaneous $478.728 $471,294 Total revenues $38,743,714 $32,241 ,816 Expenses General Government $9 ,105 ,722 $8 ,670,891 Community Development $919 ,411 $843,154 Police $9,236 ,691 $8,922,991 Public Works $7 ,169 ,914 $8,396,233 Parks and Recreation ~7,362,693 ~7,296,504 Total expenses ~33,794,431 ~34,129,773 Change in net position $4 ,949,283 -$1,887 ,957 Net position, beginning ~71,859,1 02 ~73,747,059 Net position , ending $76,808,385 $71,859,102 General Government expenses include budgets for the City Treasurer, Legislative Services, Finance, City Manager, City Attorney, City Clerk's Office, Municipal Court, Administrative Services, Human Resources, Sales Tax , Purchasing and Contracting, Information Technology and Central Charges. • Overall total revenues increased by 20% over 2012. Capital grants and contributions increased by II 0% in 2013. This increase is primarily attributed to the 32"d A venue and Youngfield widening project which included receipt of funds from Jefferson County for their funding share of the project. Additionally , the City received increased revenue from Jefferson County Open Space and the State of Colorado Lottery , which is reflected in the Open Space and Conservation Trust funds , as a result of improvements in the local and state economy. • Sales taxes increased by 18% over 2012 primarily due to increased sales tax audit revenue in addition to improvements in the national and local economies. • Investment earnings decreased by 3 7% in 2013 as a result of continued low interest rates. • Other taxes increased by I 0% in 2013 , primarily due to an increase in revenues from lodger 's tax. IV Financial Analysis of the City's Funds The focus of the City of Wheat Ridge 's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources . Such information is useful in assessing the City of Wheat Ridge 's financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2013 , the City of Wheat Ridge 's governmental funds reported combined ending fund balances of $17 million , a decrease of $151,986 in comparison with the prior year. Approximately 44% of this total amount ($8 million) constitutes unrestricted , unassigned fund balance , which is available for spending at the City 's discretion. The remainder of fund balance is restricted to indicate that it is not available for new spending because it has already been restricted for: 1) Urban Renewal Authority loan collateral ($2.2 million); 2) open space and parks ($1.8 million); 3) Police Investigations Fund activities ($41 ,075); 4) Crime Prevention Activities Fund ($280,3 II); 5) government access channel ($186 ,339) and 6) State mandated emergency reserves ($978 ,000) or committed to: I) Municipal Court Fund ($72 ,289); 2) Recreation Center Fund($ I .1 million); and 3) Public Art Fund ($38 ,206) or assigned to: I) Capital Projects Fund ($2.4 million); and 2) Capital Equipment Replacement Fund ($368 ,605). The General Fund is the chief operating fund of the City of Wheat Ridge. At the end of fiscal year 2013 , unrestricted , unassigned fund balance of the General Fund was $7.6 million , an increase of $1.1 million from the previous year, while total General Fund fund balance reached approximately$ I I million. The increase in unrestricted , unassigned fund balance can be primarily attributed to an increase in sales tax and use tax revenues and development related fees and charges. As a measure ofthe General Fund 's liquidity , it may be useful to compare both unrestricted , unassigned fund balance and total fund balance to total fund expenditures . Unrestricted , unassigned fund balance represents 30 % of total General Fund expenditures , while total fund balance represents 43% of that same amount. There were notable fund balance changes in several funds at the end of fiscal year 2013 : • The Open Space Fund saw an increase in fund balance of $300 ,728 due to decreased expenditures in 20 I 3 related to the timing of construction of Hopper Hollow Park. Additionally , the Conservation Trust Fund saw an increase in fund balance by $154,454 for the same reason. Both of these funds saw increased revenue as a result of increases in the City 's share of Jefferson County Open Space and Colorado Lottery proceeds as the State and local economies have improved . • In the Capital Projects Fund , ending fund balance decreased by $1.8 million primarily due to the completion ofthe 32"d Avenue and Youngfield widening project. • The fund balance of the Recreation Center Operating Fund decreased by $197 ,055. As the Recreation Center ages , more maintenance projects are being funded by the Center's reserves which has attributed to this fund balance decrease . VI • The fund balance in the Public Art Fund increased by $24,250 due to an increase in construction projects required to contribute to this fund. General Fund Budgetary Highlights The original budget was amended by City Council for a total of $331,782 in supplemental budget appropriations throughout the 2013 fiscal year. These amendments can be briefly summarized as follows: Supplemental Budget Appropriations • $295 ,882 allocated for prior year encumbrances • $ 30 ,000 allocated for the Senior Circulator Bus service • $ 5 ,900 allocated for the Police Department 's Sergeants Hiring Process The 2013 General Fund budget was adopted without using any of the fund balance. However. $860 ,000 was transferred to the Capital Projects Fund for capital improvements and $100,000 to the Equipment Replacement Fund for the replacement of major assets such as the police department records management and computer aided dispatch systems. As seen in 2012 , the 2013 Budget consisted of base services and programs. While the City began to see signs of economic recovery in our revenue base. revenues experienced moderate growth in areas such as sales tax revenue. Actual expenditures in 2013 were significantly less than budgeted which increased the ending fund balance . In the 2014 budget. the City was able to fund minimal preventative street maintenance projects in the Capital Projects Fund by drawing down the available fund balance to the minimum 17% reserve policy level. Capital Asset and Debt Administration Capital assets. The City of Wheat Ridge 's investment in capital assets for its governmental activities as of December 31. 2013 amounts to $58.9 million (net of accumulated depreciation). This investment in capital assets includes land. artwork. construction in progress. land improvements, buildings , vehicles, machinery and equipment. infrastructure and software. Major capital asset events during the 2013 fiscal year totaled $6.9 million and included the following: • Land Improvements in the amount of $172.000 o Park signs -Anderson (2 signs), Boyd"s Crossing, Creekside, Fruitdale, Stites , Kipling Trailhead , Apel Bacher. Founders, Louise Turner, Kendall Park, Town Center, Youngfield Trailhead o Shade structure at Outdoor Pool o Floating Deck at Prospect Lake Park o Park Shelter at Happiness Garden o Shelter along Greenbelt VII • Construction in Progress in the amount of$5.7 million o 32"d A venue and Youngfield widening project o Kipling Pedestrian Trail o Youngfield Trailhead Restroom Improvements o Hopper Hollow Park design and construction o Vehicle storage building design o 291h A venue Drainage Improvem ents • Vehicles in the amount of $412,000 o One public works asphalt patch truck o One public works 1-ton dump truck o One public works maintenance truck o One parks maintenance 4x4 truck with plow o One parks maintenance small 4x4 truck o One parks maintenance truck with a dump bed o One police investigations mini-cargo van o One police special investigations truck o One police emergency personnel SUV o One West Metro Task Force truck (donated) • Machinery and Equipment in the amount of$223 ,000 o Ridge at 38 Banner Poles o IT Server Upgrades o Mobile Shelving for the Police Department o One parks maintenance RTV utility vehicle with plow o Two Toro lawnmowers o One Toro debris blower o Three traffic control cabinets at the intersections of: 44th & Zephyr Street, 32"d & Pierce Street, and 38 1h & Ward Road o One Colorado State Patrol intoxilyzer (donated) • Infrastructure in the amount of $48 ,000 o Storm sewer infrastructure and sidewalk construction for Xenon Street VIII City of Wheat Ridge's Capital Assets (net of depreciation) Governmental Activities Land Artwork Construction in Progress Land improvements Buildings Vehicles Machinery and equipment Infrastructure Software Total Capital Assets 2013 2012 $14 ,186,642 $84 ,295 $5 ,803 ,314 $6,222 ,848 $12 ,611 ,587 $1 ,221 ,399 $3 ,381 ,763 $15 ,387 ,149 iQ $58 ,898 ,997 $13,800 ,799 $84 ,295 $146,402 $6 ,602 ,327 $13 ,262 ,934 $1 ,111 ,757 $3 ,613 ,824 $16 ,945 ,992 $2,670 $55 ,571 ,000 Long-term debt. At the end of the 2013 fiscal year, the City of Wheat Ridge had total long-term debt outstanding of $1 ,080 ,680. Of this amount, $113 ,551 is due within one year. This total debt represents compensated absences and claims payable , which are expected to be liquidated primarily with revenues of the General Fund. Economic Factors and Next Year's Budgets and Rates The City's sales and use tax rate for 2013 was 3%. The mill levy was 1.830 mills. Both rates are among the lowest in the Denver metro area. The City Council reviewed alternative revenue options in 2013 and a City Council sales tax increase measure was vetoed by the Mayor. City Council is continuing their alternative revenue efforts with a potential half cent or full cent sales tax increase measure on the November 2014 ballot. A half-cent sales tax increase will generate approximately $3 million in additional revenue and a full cent sales tax increase will generate $6 million in additional revenue . The adopted 2014 fiscal year budget is $37 million. It includes a $28 million operating budget and a $4.2 million CIP budget. The decrease in the Capital Projects Fund from 2013 was the result of completion of work on the 32 "d A venue and Youngfield widening project. Requests for Information This financial report is designed to provide a general overview of the City of Wheat Ridge 's finances for those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Administrative Services Director City of Wheat Ridge 7500 W. 291h Avenue Wheat Ridge , Colorado 80033 IX BASIC FINANCIAL STATEMENTS ASSETS Cash and Inve stment s Accounts Receivable Property Taxes Receivable I ntergovcmmental Receivables Accrued Interest Receivable Due from omponent Unit Property lleld for Re sa le Capital Asset . ot Being Depreciated CITY OF WHEAT RIDGE, COLORADO STATEMENT OF NET POSITION December 31. 2013 Capital Assets. ct or Accumulated Depreciation TOTAL ASSETS LIA BI LITI ES Accounts Pa yable Accrued Liabilities Refundable Deposits Unearned Revenues Due to Primary Government oncurrent Liabilities Due Within One Year Due in More Than One Year TOTAL LIABILITIES DEFERR E D I NFLOW S OF R ESOll R CES Property Taxes NET POSIT ION ct Inves tment in Capital Assets Restricted for Open Space and Parks Restricted for Police Inve stig a tion Re stricted for Crime Prevention Activities Re strict ed for Government Access Channel Re stricted tor Emergencies Unrestricted TOTAL ETPO ITIO PRIMARY GOVERNMENT GOVERNMENTAL ACTIVITIES $ 13.030.555 4.340.498 751.889 711.396 19.876 2.531.038 20.074.25 I 38.824.746 80.284.249 1.006.445 457.491 135.569 43.790 113.55 I 967.129 2.723.975 75 1.889 58.898.997 1.770.060 41.075 280.311 186.3 39 978.000 14 .653.603 $ 76.808.385 The accompanying notes are an integral part of the tinancial statements . COMPO ENT UNIT URBAN RE EWAL AUTHORITY $ 2.019.047 14 .163 77.542 1.680.299 3. 791.05 I 38.837 2.531.038 1.541.255 729.860 4.840.990 14.163 ( 1.064 .1 02) $ ( 1.064.1 02) NET (EXPENSE) REVENUE AND CHANGE IN NET POSITION PRIMARY COMPONENT GOVERNMENT UN IT GOVERNMENTAL URBAN RENEWAL ACTIV ITI ES AUTIIORITY $ (8. 796.634) $ 111 .9 11 (8.063.608) (614.056) (3 .159.361) (20.52 1. 748) (264.022) 736.015 13.606 18.209.871 498.613 2.658.316 1.685.102 1.620.2 16 82.783 17 .345 478.728 1.250 25.471.031 530.814 4.949.283 266.792 71.859.102 ( 1.330.894 ) $ 76.808.385 $ ( 1.064.1 02} CITY OF WHEAT RJDGE. COLORADO BALANCE SHEET GOVERNMENTAL FUNDS December 31 , 2013 OTHER CAPITAL GOVERNMENTAL GENERAL PROJECTS FUNDS TOTALS ASSETS Cash and Investment s $ 6.994,980 $ 2,374,707 $ 3,660.868 $ 13 ,030,555 Accounts Receivable 4.112,009 10,788 217.701 4,340,498 Property Taxes Receivable 751.889 751 ,889 Intergovernmental Receivables 553.463 157 ,933 711,396 Accrued Interest Receivable 9.778 8,216 1.882 19,876 Due from Component Unit 2.220.739 310,299 2,531,038 TOTAL ASSETS $ 14 ,642.858 $ 2.861 .943 $ 3.880.451 $ 21,~252 LIABILITIES Accounts Payable $ 569.323 $ 334 ,443 $ 102.679 $ 1,006,445 Accrued Liabilities 399.539 57.952 457,491 Refundable Deposits 135.569 135.569 Unearned Revenues 43 ,790 43.790 TOTAL LIABILITIES 1.148.221 334,443 160,631 1.643 ,295 DEFERRED INFLOWS OF RESOURCES Property Taxes 751,889 751,889 Unavailable Revenues 1,754,160 115.459 9.000 1.878.619 TOTAL DEFERRED INFLOWS OF RESOURCES 2,506,049 115 ,459 9.000 2,630.508 FUND BALANCES Nonspendable Due from Component Unit 2.220.739 2,220.7 39 Restricted for Open Space and Parks 1,770,060 1,770,060 Restricted for Police Inv estigations 41.075 41.075 Restricted for Crime Prevention Activities 280.311 280,311 Restricted for Government Access Channel 186,339 186.339 Restricted for Emergencies 978.000 978.000 Committed to Municipal Court 72.289 72,289 Committed to Recreation Center 1.140.274 1.140,274 Committed to Public Art 38.206 38,206 Assigned to Capita l Projects 2,412,041 2,412 ,041 Assigned to Equipment Replacement 368.605 368.605 Unrestricted. Unassigned 7,603,510 7,603,510 TOTAL FUND BALANCES 10 ,988,588 2,412 ,041 3,710,820 17 ,111,449 TOTAL LIABILITIES. DEFERRED INFLOWS OF RESOURCES. AND FUND BALANCES $ 14 ,642.858 $ 2.861 ,943 $ 3,880,451 $ 21,385 ,252 The accompanying notes are an integral part of the financial statements . 3 CITY OF WHEAT RJDGE. COLORADO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITIO December 31. 20 13 Amounts Reported for Governmental Activities in the Statement of et Position are Different Because: Total Fund Balances of Governmental Funds Capital assets used in governmental activities arc not financial resources and. therefore. arc not reported in governmental funds Long-term liabilities. including compensated absences ($1.03 1.237) and claims payable ($49.443). arc not due payable in the current )ear and. therefore. are not reported in governmental funds. Certain long-term assets are not available to pay current expenditures and. therefore. are deferred in gm ern mental funds. Total Net Po ition of Governmental Activities The accompanying notes are an integral part of the financial statements. 4 $ 17.111.449 58.898.997 ( 1.080.680) 1.878.619 $ 76.808.385 REVENUES Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeitures Investment Income Miscellaneous TOTAL REVENUE EXPENDITURES Current General Government Community Development Police Public Works Parks and Recreation Capital Outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers In Transfers Out CITY OF WHEAT RIDGE. COLORADO STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended December 31 , 2013 CAPITAL GENERAL PROJECTS $ 22,605 ,703 $ 217 ,710 969,717 2,044 ,800 4,403.064 1,185 ,840 7,678 706,733 35.540 34.241 401 ,413 37,082 27 ,949,746 4.699,775 8.742,683 912,997 8.633.214 4,018.990 3,447.765 7.320.167 25 ,755 ,649 7.320.167 2.194.097 (2.620.392) 860.000 (960.000) TOTAL OTHER FINANCING SOURCE (USES) (960,000) 860,000 NET CHANGE IN FUND BALANCES 1,234.097 ( 1. 760.392) FUND BALANCES. Beginning 9.754,491 4.172_!_433 FUND BALANCES. Ending $ 10,988 ,588 $ 2,412 ,041 OTHER GOV ERNMENTAL FUNDS $ 331 ,947 1.341 ,113 2.076,637 54 ,874 13 .002 40,233 \857,806 16 .325 374.560 3,192 .6 12 3.583,497 274.309 100.000 100.000 374,309 3_!_336.5 11 $ 3,710 ,820 The accompanying notes are an integral part of the financial statements. 5 TOTALS $ 23.155,360 969,717 7.788.977 3.270.155 761.607 82.783 478.728 36,507.327 8.759.008 912 ,997 9.007.774 4.018.990 6.640,377 7.320,167 36.659.313 ( 151 ,986) 960.000 (960,000) ( 151.986) 17,263.435 $ 17 .111.449 CITY OF WHEAT RIDGE. COLORADO RECONCILIATION OF THE STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended December 3 I. 2013 Amounts Reponed for Governmental Activities in the Statement of Activities are Different Because: et Change in Fund Balances of Governmental Funds Capital outlays to purchase or construct capital assets are reponed in governmental funds as expenditures. However. for governmental activities those costs are capitalized in the statement of net position and arc allocated over their estimated useful lives as annual depreciation expense in the statement of activities. This is the amount by ''hich capital outlay $6.488.893 and contributed assets $408.843 exceeded depreciation expense ($3.537.874) and disposals ($31.865) in the current year. orne expenses reported in the statement of activities do not require the use of current financial resources and. therefore. are not reported as expenditures in governmental funds. This includes the change in compensated absences ($47.613) and in claims payable ($6.659). Revenues in the statement of activities that do not provide current financial resources are deferred in the governmental funds. Change in et Position of Governmental Activities The accompanying notes are an integral part of the financial statement . 6 $ ( 151.986) 3.327.997 (54.272) 1.827.544 $ 4.949.283 NOTE 1: CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31 , 2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Wheat Ridge, Colorado (the "City") was incorporated in August, 1969, and became a home rule city in 1976, as defined by State statutes. The City is governed by a Mayor and eight- member Council elected by the residents. The accounting policies of the City conform to generally accepted accounting principles as applicable to government entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Reporting Entity The financial reporting entity consists of the City, organizations for which the City is financially accountable, and organizations that raise and hold economic resources for the direct benefit ofthe City. All funds, organizations, institutions, agencies, departments and offices that are not legally separate are part of the City. Legally separate organizations for which the City is financially accountable are considered part of the reporting entity. Financial accountability exists if the City appoints a voting majority of the organization's governing board and is able to impose its will on the organization, or if the organization provides benefits to, or imposes financial burdens on, the City. Based on the application of these criteria, the City includes the following entity in its reporting entity. The Wheat Ridge Urban Renewal Authority (the "Authority") was created to redevelop or rehabilitate certain blighted areas within the City. The Authority board members are appointed by the Mayor and City Council. Although the Authority is legally separate from the City, the Authority's primary revenue source, tax increment financing, can only be establi hed by the City. The Authority is discretely presented in the financial statements, and does not issue separate fmancial statements. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all activities of the City and its component unit. For the most part, the effect ofinterfund activity has been removed from these statements. Exceptions to this general rule are charges for interfund services that are reasonably equivalent to the services provided. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported in a single column. The primary government is reported separately from the legally separate component unit for which the City is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of the given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. lnternally dedicated resources are reported as general revenues rather than as program revenues. 7 NO TE 1 : CITY OF WHEAT RIDGE, COLORADO NOTES TO FfNANCIAL STATEMENTS December 31 , 20 13 SUMMAR Y O F SIG N IF I CANT ACCO UNTI NG POLICIES (Continued) G o ve rnm e nt-w id e and F und Fin a nci al S tat e m e nts (Continued) Separate financial statements are provided for governmental funds. Major individual funds are reported as separate columns in the fund financial statements. Meas ureme nt Focus, Bas is of Acc ountin g, a nd Fin anci al Stat e me nt Pr ese ntation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred, regardless of the timing of related cash flows. Property taxes arc recognized as revenues in the year for which they are levied. Grant and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current year or soon enough thereafter to pay liabilities of the current year. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current year. Taxes, intergovernmental revenues , and interest associated with the current year arc considered to be susceptible to accrual and so have been recognized as revenues of the cun·cnt year. All other revenues are considered to be measurable and available only when cash is received by the City. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences , are recorded only when payment is due. When both restricted and unrestricted resources are available for use , it is the City 's practice to use re tricted resources first, then unrestricted re ources as they are needed . The City reports the following major governmental funds: The General Fund is the general operating fund of the City . lt is used to account for all financial resources except those required to be accounted for in another fund. The Capital Projects Fund accounts for the accumulation of resources from a lodging tax, intergovernmental revenues and General Fund transfers for the acquisition or construction of major capital assets. Assets, Liabili ties and Net Position /Fund Balances Cash and Investments -Investments are reported at fair value. 8 NOTE 1: CITY OF WHEAT RIDGE , COLORADO NOTES TO FINANCIAL STATEMENTS December 31 , 2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position/Fund Balances (Continued) Receivables -Accounts receivable include sales , use and lodging taxes. Receivables are reported at their gross value and , where appropriate, are reduced by the estimated portion that is expected to be uncollectible. Property Held for Resale-Property that is held with the intent to sell is reported at the estimated fair market value. Capital Ass ets -Capital assets , which include property, equipment, and infrastructure acquired or constructed since 1980, are reported in the government-wide financial statements. Capital assets are defined by the City as assets with an initial , individual cost of $5 ,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives . Land Improvements Buildings Vehicles, Machinery and Equipment Infrastructure Software 10-40 years 10-40 years 3-40 years 20-50 years 5 years Unearned R evenues -Unearned revenues include business license fees collected in advance . Deferred Inflo ws of Resources -Deferred inflows of resources include property taxes earned but levied for a subsequent year. In addition, revenues not available as current financial resources are deferred in the governmental fund financial statements. Compen sated Abs ences -Employees of the City are allowed to accumulate unused vacation and sick time up to a maximum based on years of service. Upon termination of employment from the City, an employee will be compensated for all accrued vacation time at their current pay rate. A long-term liability has been reported in the government-wide financial statements for the accrued vacation time. Long-Term D ebt -In the government-wide financial statements , long-term debt and other long-term obligations are reported as liabilities. In the fund financial statements , governmental funds recognize the face amount of debt issued as other financing sources . Governmental funds recognize long-term liabilities only when payment is due. Payments of long-tenn debt are reported as current expenditures. 9 NOTE 1: NOTE 2: CITY OF WHEAT RIDGE , COLORADO NOTES TO FINANCIAL STATEMENTS December 3 I , 2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position/Fund Balances (Continued) Net Position /Fund Balances-In the government-wide and fund financial statements, net position and fund balances are restricted when constraints placed on the use of resources are externally imposed. As reported in the fund financial statements, the City Council esta bli shes a fund balance commitment through passage of a resolution. The City Council has delegated to the City Manager or his designee the authority to assign fund balances for specific purposes . As adopted by City Council policy, the City will maintain a minimum unrestricted fund balance of at least two months , or approximately 17 %, of its General Fund operating expenditures. When expenditures are incurred for purpose for which both restricted and unrestricted fund balances are available, the City 's policy is to use restricted amounts first , followed by committed , assigned and unassigned amounts . Property Taxes Property taxes attach as an enforceable lien on property on January I , are levied the following December, and collected in the subsequent year. Taxes arc payable in full on April 30 or in two in tallments on February 28 and June 15. The County Treasurer's office collects property taxes and remits to the City on a monthly ba is. Since propc11y tax revenues are collected in arrears during the succeeding year, receivables and corresponding deferred inflows of resources are reported at year end. Contraband Forfeitures The Colorado Contraband Forfeiture Act allows law enforcement agencies to retain proceeds from the seizure of contraband. These transactions are reported in the Police Investigation Special Revenue Fund. CASH AND INVESTMENTS A summary of cash and investments at December 31, 2013, follows: Petty Cash $ 3 ,150 Cash Deposits 12,582,230 Investments 2,464,222 Total $ 15~049~602 10 NOTE2: CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31 , 2013 CASH AND INVESTMENTS (Continued) Cash and investments are reported in the financial statements as follows: Cash and Investments -Primary Government Cash and Investments-Component Unit Total Cash Deposits $ 13,030,555 2,019,047 $ 15,049,602 The Colorado Public Deposit Protection Act (PDPA) requires all local government entities to deposit cash in eligible public depositories. Eligibility is determined by State regulations. Amounts on deposit in excess of federal insurance levels must be collateralized by eligible collateral as determined by the PDPA. The PDPA allows the financial institution to create a single collateral pool for all public funds held. The pool is to be maintained by another institution, or held in trust for all uninsured public deposits as a group. The market value of the collateral must be at least equal to 102% of the uninsured deposits. At December 31, 2013, the City and the Authority had bank deposits of $7,234,773 and $1,769,133, respectively, collateralized with securities held by the financial institutions' agents but not in their name. Investments The City and the Authority are required to comply with State statutes which specify investment instruments meeting defined rating, maturity and concentration risk criteria in which local governments may invest. State statutes do not address custodial risk. The City has further restricted the investments of the City to the following. • Obligations of the United States and U.S. Agency securities • Corporate debt • Commercial paper • Bankers' acceptances • Repurchase agreements collateralized by authorized securities • General obligations of U.S. local government entities • Guaranteed investment contracts • Money market funds • Local government investment pools The City and the Authority had the following investments at December 31, 2013: Investment Maturities (in :tears} Investment Type S&P Rating Less Than I I -5 Fair Value U.S. Agency Securities AA+ $ 253,005 $ 2,002,505 $ 2,255,510 Municipal Securities A+ 208.712 208,712 Total $ 253,005 $ 2,211,217 $ 2,464,222 11 NOTE2: NOTE3: CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2013 CASH AND INVESTMENTS (Continued) Investments (Continued) Interest Rate Risk -State statutes generally limit investments to an original maturity of five years unless the governing board authorizes the investment for a period in excess of five years. Municipal securities are limited to an original maturity of three years . Credit Risk-State statutes limit investments in municipal securities to those rated in the highest rating category by two or more nationally recognized statistical rating organizations. Concentration of Credit Risk-State statutes do not limit the amount the City may invest in one issuer, except for corporate securities. At December 31, 2013 , the City 's investments in the Federal National Mmtgagc Association, Federal Farm Credit Bank, Federal Home Loan Bank, and Colorado Educational and Cultural Facilitic Authority were 51 %, 20%, 20% and 9%, respectively , of total investments. Legal Compliance At December 31, 2013 , the City owned certificates of deposits with a balance of$2 ,200 ,023 held by banks not registered under the PDPA. In addition , the City purchased revenue obligations of the Colorado Educational and Cultural Facilities Authority that were not allowed by the City 's policy and that were rated below the limitations established by State statutes. These may be violations of State statutes. COMPONENT UNIT LOAN During 2008 , the City loaned $410,145 to the Authority to collateralize a redevelopment loan. During 2012, the City loaned an additional $1 ,790,594 to the Authority as additional collateral. During 2013 , the City loaned $330,299 to the Authority to acquire additional property for redevelopment. The loans are non-interest bearing. The Authority was required to repay the loans when the redevelopment properties were sold or on April 14 , 2014 . In April , 2014 , the Authority repaid $1 ,956 ,565. The remaining loan balances arc due upon sale of the redevelopment properties. 12 CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE4: CAPITAL ASSETS Capital asset activity for the year ended December 31, 2013, is summarized below. Balances Balances 12/31/12 Additions Deletions 12/31 /13 Governmental Activities Capital Assets , Not Being Depreciated Land $ 13 ,800 ,799 $ 385 ,843 $ $ 14.186,642 Artwork 84,295 84 ,295 Construction in Progress 146 402 5.656.912 5.803,314 Total Capital As sets, Not Being Depreciated 14.031 496 6 ,042,755 20 ,074,251 Capital Assets , Being Depreciated Land Improvements 10 ,295 ,603 171 ,933 94,853 10 ,372 ,683 Buildings 22 ,104 ,353 22 ,104 ,353 Vehicles 4 ,528 ,202 411 ,869 473 ,780 4 ,466.291 Machinery and Equipment 6 ,743 ,106 222,987 91 ,142 6 ,874,951 Infrastructure 63 ,343 ,812 48,192 63 ,392 ,004 Software 200 739 200 739 Total Capital Assets , Being Depreciated 107,215 ,815 854 981 659 775 107,411,021 Less Accumulated Depreciation Land Improvements 3 ,693 ,276 541 ,927 85 ,368 4 ,149 ,835 Buildings 8,841 ,419 651 ,347 9 ,492,766 Vehicles 3,416 ,445 295 ,608 467 ,161 3 ,244 ,892 Machinery and Equipment 3 ,129,282 439,287 75 ,381 3 ,493 ,18 8 Infrastructure 46,397 ,820 1,607 ,035 48 ,004 ,855 Software 198 069 2,670 200 739 Total Accumulated Depreciation 65,676,311 3,537 874 627 910 68,586,275 Total Capital Assets , Being Depreciated, Net 41 ,539 ,504 (2 ,682,893) 31,865 38 ,824,746 Governmental Activities Capital Assets, Net $ 55,571,000 $ 3,359,862 $ 31,865 $ 58,898,997 Depreciation expense was charged to programs ofthe City as follows: General Government $ 283 ,300 Community Development 6,414 Police 244,294 Public Works I ,834,283 Parks and Recreation 1,169,583 Total ~ 335373874 13 NOTE 5: NOTE 6: CITY OF WHEAT RIDGE, COLORADO OTES TO FINANCIAL STATEMENTS December 31, 2013 LONG-TERM DEBT Following is a summary of long-term debt transactions for the year ended December 31, 2013. Balances Balances Due Within 12 /3 II 12 Addi ti ons Pa:tments 12 /31113 One Year Governmental Activities Compensated Absences $ 983.624 $ 122 ,99 5 $ 75,382 $ I ,031 ,23 7 $ 64.108 Claims Payable 42 ,78 4 90,841 84.182 49,443 49.443 Total $ 1,026,408 $ 213,836 $ 159,564 $ 1,080,680 $ 113,551 Compensated absences are expected to be liquidated primarily with revenues of the General Fund. Balances Balances Due Within 12 /31/12 Addition s Pa:tments 12 /3 1/13 One Year Urban Renewal A uth ority Loan Payable $ 2,467,647 $ $ 196,532 $ 2,271,115 $ 1,541,255 In April 2008, the Authority entered into a loan agreement with FirstBank of Wheat Ridge in the amount of$3 ,285 ,000 to purchase property for redevelopment. The loan accrued interest at 4 % per annum . Principal and interest payments of $24 ,389 were due on the 15 'h of each month with a final balloon payment of$2 ,227 ,205 due on April 15 ,2014. On April 15, 2014 , the Authority repaid $1 ,44 7 ,904 , and the outstanding balance of$780,000 was refinanced. The new loan accrues interest at 3.5 % per annum. Principal and interest payments of$8 ,516 arc due on the 15 'h of each month with a final balloon payment of $553 , I 02 due on April 15 , 2017. Future debt service to maturity are as follows: Y car Ended December 3 I , Principal Interest Total 2014 $ I ,541 ,255 $ 47 ,943 $ I ,589 ,198 2015 77 ,544 24 ,644 102 ,188 2016 80,277 21,911 102 ,188 2017 572,039 6 610 578 649 Total $ 2,271,115 $ 101,108 $ 2,372,223 On May 14, 2014, the Authority approved a loan agreement with the Colorado State Bank and Trust for $2,455,000 to finance infrastructure improvements associated with the redevelopment land held by the Authority. INTERFUND TRANSACTIONS During the year ended December 31, 2013, the General Fund transferred $860,000 and $100,000 to the Capital Projects and Equipment Replacement Funds, respectively, to finance capital projects and equipment purchases. 14 NOTE 7: NOTES: CITY OF WHEAT RIDGE , COLORADO NOTES TO FINANCIAL STATEMENTS December 31 , 2013 STEWARDSHIP, COMPLIANCE AND ACCOUNT ABILITY Accountability At December 31 , 2013 , the Authority had a negative net position of $1 ,064,102. Management expects this deficit to be eliminated with future tax increment financing revenues . RJSK MANAGEMENT The City is exposed to various risks of Joss related to torts ; theft of, damage to , and destruction of assets ; errors and omissions ; injuries to employees ; and natural disasters. The City has agreed to self-insure for general liability claims to a maximum of$150,000, automobile, property and physical damage claims to a maximum of $10 ,000 , and workers compensation claims to a maximum of $5 ,000 per occurrence . The City accounts for its risk management activities in the General Fund. Claims liabilities, including estimated incurred but not reported claims (lBNR), are reported in the government-wide financial statements if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in claims payable for the years ended December 31 , 2013 and 2012 , were as follows : Claims Payable , January 1 lncurred Claims Claims Paid Claims Payable , December 31 $ $ 2013 42 ,784 90 ,841 (84,182) 49.443 2012 $ 31 ,406 100 ,954 (89,576) ~ 422784 For excess liability , property and workers compensation claims , the City is involved with the Colorado Intergovernmental Risk Sharing Agency (CIRSA), a separate and independent governmental and legal entity formed by intergovernmental agreement by member municipalities pursuant to the provisions of24-1 0-115 .5 , Colorado Revised Statutes (1982 Replacement Volume) and the Colorado Constitution, Article XlY, Section 18(2). The purposes of CIRSA are to provide members defined liability, property, and workers compensation coverages and to assist members to prevent and reduce losses and injuries to municipal property and to persons or property which might result in claims being made against members of CIRSA, their employees and officers. It is the intent of the members ofCIRSA to create an entity in perpetuity which will administer and use funds contributed by the members to defend and indemnify, in accordance with the bylaws , any member of CIRSA against stated liability of loss , to the limit of the fmancial resources of CIRSA. It is also the intent of the members to have CIRSA provide continuing stability and availability of needed coverages at reasonable costs . All income and assets of CIRSA shall be at all times dedicated to the exclusive benefit of its members. 15 NOTES: NOTE9: CITY OF WHEAT RIDGE , COLORADO NOTES TO FINANCIAL STATEME TS December 31 , 2013 RISK MANAGEMENT (Continued) ClRSA is a separate legal entity and the City does not approve budgets nor does it have the ability to significantly affect the operations ofClRSA. RETIREMENT COMMITMENTS Police Pension Plan The City contributes to a single-employer defined contribution money purchase pension plan on behalf of sworn police officers. The Plan is administered by the International City/County Management Association (ICMA). Employees are required to contribute 10% of their compcn ation to the Plan, and the City contributes I 0 %. Employees become vested in City contributions to the Plan at 20% annually, beginning in the third year of employment. The contribution requirements of Plan members and the City arc established and may be amended by the City Council. During the year ended December 31 ,2013 , the City and employee contributions to the Plan were $517 ,587 each , equal to the required contributions. Department Head Pension Plan City department heads participate in a multiple-employer defined contribution pension plan upon employment with the City. The Plan is administered by 1CMA . Department heads are required to contribute 4 % of their compensation to the Plan and the City contributes 5 %, except for the City Manager for which the City contributes 10%. Employees become vested in all contributions to the Plan immediately. The contribution requirements of Plan members and the City are established and may be amended by the City Council. During the year ended December 31 , 2013 , the City and employee contributions to the Plan were $43 ,921 and $29 ,387 , respectively, equal to the required contributions. Employee Pension Plan The City contributes to a multiple-employer defined contribution pension plan on behalf of all employees, except sworn police officers and department head . The Plan is administered by ICMA . Employees are required to contribute 4 % of their compensation to the Plan , and the City contributes 4 %. Employees become ve ted in City contributions to the Plan at 20 % annually after one year of employment. The contribution requirements of Plan members and the City are established and may be amended by the City Council. During the year ended December 31 ,2013 , the City and employee contributions to the Plan were $300,866 each , equal to the required contributions . 16 NOTE 10: CITY OF WHEAT RIDGE , COLORADO NOTES TO FINANCIAL STATEMENTS December 31 , 2013 COMMITMENTS AND CONTINGENCIES Tabor Amendment Colorado voters passed an amendment to the State Constitution, Article X , Section 20 , which has several limitations , including revenue raising, spending abilities , and other specific requirements of state and local governments. The Amendment requires, with certain exceptions, advance voter approval for any new tax, tax rate increase, rrull levy above that for the prior year, extension of an expiring tax , or tax policy change directly causing a net tax revenue gain to the City. Revenue in excess of the fiscal year spending limit must be refunded in the next fiscal year unless voters approve retention of such revenue. The City 's management believes it is in compliance with the provisions of the Amendment. However, the Amendment is complex and subject to interpretation . Many of its provisions may require judicial interpretation . In November, 2006, voters agreed to allow the City to spend all revenues generated during 2006 and each subsequent year for police protection, street construction -repair and maintenance , parks and recreation -trails and open space, capital projects, and other basic municipal services , without limitation. The City has established an emergency reserve, representing 3 % of qualifying expenditures , as required by the Amendment. At December 31 , 2013 , the emergency reserve of $978,000 was reported as restricted fund balance in the General Fund. The Authority is not subject to the Tabor Amendment. See: Marian L. Olson v. City of Golden , et. al., 53 P .3d 747 (Co . App .), certiorari denied. Economic Development Incentive Agreements The City and the Authority have approved economic development incentive agreements that require the City and/or the Authority to reimburse certain businesses for sales and use taxes generated by the businesses. During the year ended December 31 , 2013 , the City paid $80,526 under these agreements and accrued $38 ,955 for payment in the subsequent fiscal year. Litigation The City is involved in various threatened and pending litigation . The outcome of this litigation cannot be determined at this time. 17 REQUIRED SUPPLEMENTARY INFORMATION REVENUES Taxes Licenses and Permits I ntergovemmental Charges for Services Fines and Forfeitures Investment Income Miscellaneous TOTAL REVENUES EXPEND ITURES Current General Government Community Development Police Public Works Parks and Recreation TOTAL EXPENDITURES EXCESS OF REVENUES OYER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers Out NET CHANGE IN FUND BALANCE FUND BALANCE. Beginning FUND BALANCE. Ending CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE GENERAL FUND Year Ended December 3 I. 20 13 ORIGINAL FINAL BUDGET BUDGET $ 21.971.000 $ 21.971 ,000 1,039,729 1,039,729 2,266.794 2,266,794 1.056.143 1,056.143 830,800 830,800 160,000 160,000 422.083 422 ,083 27.746,549 27 ,746,549 9,096 ,694 9.441 ,459 1,205 .909 1,263 ,602 8.845.952 9,044,265 4,261 ,591 4,424.652 4,336.403 3,904,353 27.746,549 28 ,078 ,331 (331 ,782) (960,000) (960.000) (960.000) (I ,291 , 782) 8,627 ,017 9,754.491 $ 7 667.017 $ 8,462.709 See the accompanying Independent Auditors' Report. 18 VARIANC E Positive ACTUAL (Negative) $ 22 ,605.703 $ 634.703 969,717 (70.012) 2,044 800 (221 ,994) 1.185.840 129 ,697 706.733 (124 ,067) 35.540 (124 ,460) 401.413 (20.670) 27 ,949,746 203.197 8.742.683 698.776 912.997 350,605 8.633 ,214 411.051 4 ,018,990 405.662 3.447 ,765 456,588 25 ,755 ,649 2.322.682 2,194.097 2.525 .879 (960 ,000) 1.234.097 2,525.879 9.754 ,491 $ 10.988.588 $ 2.525,879 NOTE 1: CITY OF WHEAT RIDGE , COLORADO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31 , 2013 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgets and Budgetary Accounting State statutes require that all funds have legally adopted budgets and appropnat10ns . Total expenditures may not exceed the amount appropriated at the fund level. Budgets are adopted for all funds of the City on a basis consistent with generally accepted accounting principles (GAAP). The City follows these procedures in establishing the budgetary data reflected in the financial statements: • Management submits to the City Council a proposed operating budget for the fi cal year commencing the following January I. The operating budget includes proposed expenditures and the means of financing them. • Public hearings arc conducted to obtain taxpayer comments . • Prior to December 31 , the budget is legally enacted through passage of a resolution. • Revisions that alter the total expenditures of any fund must be approved by the City Council. • All appropriations lapse at year end. Budgetary information presented in the financial statements for the Wheat Ridge Urban Renewal Authority was approved by the governing board of the Wheat Ridge Urban Renewal Authority. 19 SUPPLEMENTARY INFORMATION CITY OF WHEAT RIDGE. COLORADO COMBINING BALA CE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31. 2013 ee the accompanying Independent Auditors' Report . 20 RECREATION CENTER CRIME EQUIPMENT OPERATING PREVENTION PUBLIC ART REPLACEMENT TOTALS $ 1.229.103 $ 276.641 $ 38 ,206 $ 367.832 $ 3,660.868 16.182 773 217.701 1.882 $ 1,229,103 $ 292.823 $ 38.206 $ 368.605 $ 3,880,451 $ 49.669 $ 4,546 $ $ $ 102 ,679 39,160 7,966 57 ,952 88 ,829 12.512 160,631 9.000 1.770.060 41.075 280.311 280,311 72 ,289 1.140.274 1,140,274 38 ,206 38.206 368.605 368 ,605 1.140,274 280.311 38,206 368.605 3.710,820 $ 1.229, I 03 $ 292 ,823 $ 38 206 $ 368.605 $ 3,880,451 REVENUE Taxes Intergovernmental Charges for Service Fines and Forfeitures Inve st men t Income Miscellaneous TOTAL REVE UES EX PE DITURE Cu rre nt General Government Police Park s and Rec reation TOTAL EX PE DITURES CITY OF WHEAT RIDGE . COLORADO COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31. 2013 POLI CE OPEN SPACE I VESTIGA TION $ $ $ 1.012.720 1.5 18 57 24.540 1.693 1.038. 778 1.750 2.951 738.050 738.050 2.95 1 EXCESS OF REVE UE OVER (UNDER) EX PE DITURES 300.728 (1.201) OTIIER FINA CI G OURCES Transfers In NET CHANGE I FUNDBALA CES 300.728 ( 1.20 I) FUND BALA CES . Beg innin g 895.899 42 .276 FUND BALANCES . Endin g $ 1.196.627 $ 41.075 $ ec the accompanying Independent Auditors' Report . 21 MUNICIPAL CONSE RVATION COU RT TRUST $ 328.393 22.457 281 1.066 22.738 329.459 16.3 25 I 75.005 16.325 175 .005 6.4 13 I 54.454 6.413 I 54.454 65.876 418.979 72.289 $ 573.433 RECREATION CENTER CRIME EQUIPMENT OP ERATING PREVENTION PUBLIC ART REPLACEMENT TOTALS $ $ 326,566 $ 5.381 $ $ 331 ,947 1.341.113 2.071.872 4.765 2.076.637 32,417 54 ,874 10,630 1.058 104 (1.712) 13 ,002 14!000 40.233 2.082.502 360,041 24 ,250 (1 ,712) 3.857.806 16,325 371.609 374.560 2,279,557 3,192 ,612 2,279.557 371 ,609 3,583.497 (197 ,055) (11.568) 24.250 (1 ,712) 274.309 100 .000 100,000 (197.055) (11.568) 24.250 98 ,288 374 ,309 1,337,329 291.879 13.956 270,317 3.336,511 $ I ,I40,274 $ 280 311 $ 38.206 $ 368,605 $ 3,710,820 REVE UES I ntergovemrnental In vestment Income Miscellaneous TOTAL REVE UE EXPE DITURES Current Parks and Recreation ETC II ANGE I FUND BALANCE FU DBALA CE. Beginning FU DBALA CE. Ending CITY OF WHEAT RIDGE. COLORADO BUDGETARY COMPARISO SCHEDULE OPEN SPACE FUND Year Ended December 31.2013 ORIGINAL FINAL BUDGET BUDGET $ 1.140.720 $ 1.140.720 5.000 5.000 3.000 3,000 1.148.720 1.148.720 1.574.782 1.610.691 (426.062) (461.97 1) 473.558 895.899 $ 47.496 $ 433.928 See the accompanying Independent Auditors' Report . 22 VARIANCE Positive ACTUAL (Negative) $ 1.012.720 $ (128.000) 1.518 (3.482) 24.540 2 1.540 1.038.778 (I 09.942) 738.050 872.641 300.728 762.699 895.899 $ 1.196.627 $ 762.699 REVENUES Investment Income Miscellaneous TOTAL REVENUES EXPENDITURES Current Police Capital Outlay TOTAL EXPENDITURES NET CHANGE IN FUND BALANCE FUND BALANCE. Beginning FUND BALANCE. Ending CITY OF WHEAT RIDGE. COLORADO BUDGETARY COMPARISON SCHEDULE POLICE INVESTIGATION FUND Year Ended December 31. 2013 ORIGINAL AND FINAL BUDGET $ 25 25 3.500 26 ,500 30 ,000 (29.975) 42.276 $ 12 301 See the accompanying Independent Auditors' Report . 23 VARIANCE Positive ACTUAL (Negative) $ 57 $ 32 1,693 1.693 1,750 1,725 2,951 549 26 ,500 2 .951 27.049 (1 ,201) 28.774 42,276 $ 41 075 $ 28 774 REVE UE Fines and Forfeitures In vestment Income TOTAL REVE UES EXPENDITURES Current General Government ETCII A GE l FUND BALA CE FU DBALA CE. Beginning FUND BALANCE. Ending CITY OF WHEAT RIDGE. COLORADO BUDGETARY COMPARISON SCHEDULE MUNICIPAL COURT FUND Year Ended December 3 I. 20 13 ORIGINAL FINAL BUDGET BUDGET $ 30.000 $ 30.000 550 550 30.550 30.550 24.000 24.000 6 .55 0 6.550 33.078 65.876 $ 39.628 $ 72.426 See the accompanying Independent Auditors' Report. 24 VARIA CE Positive ACTUAL (Negative) $ 22.457 $ (7.543) 281 (269) 22.738 (7.812) 16.325 7.675 6.413 ( 137) 65.876 $ 72.289 $ ( 137) REVENUES Intergovernmental Investment Income TOTAL REVENUES EXPE DITURES Current Parks and Recreation NET CHANGE IN FUND BALANCE FUND BALANCE. Beginning FUND BALANCE. Ending CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE CONSERVATION TRUST FUND Year Ended December 31 , 2013 ORIGINAL FINAL BUDGET BUDGET $ 280.000 $ 280.000 1.000 1,000 281 ,000 281 ,000 524.600 670.894 (243.600) (389.894) 291 ,973 418,979 $ 48 373 $ 29 085 See the accompanying Independent Auditors' Report. 25 VARIANCE Positive ACTUAL (Negative) $ 328.393 $ 48 ,393 1.066 66 329.459 48.459 175 ,005 495 ,889 154 ,454 544.348 418 ,979 $ 573 433 $ 544 348 REVE UES Charges for ervices Investment Income TOTAL REVENUES EXPE DITURES Current Parks and Recreation ETCIIA GEl FUNDBALA CE FUND BALA CE. Beginning F DBALA CE. Ending CITY Of WHEAT RIDGE. COLORADO BUDGETARY COMPARISON SCHEDULE RECREATION CENTER OPERATING FUND Year Ended December 31. 20 13 ORIGNAL AND FINAL BUDGET $ 2.095.357 45.000 2,140.357 2.395.076 (254 .719) 1.379.639 $ ~.920 See the accompanying Independent Auditors' Report. 26 $ $ VARIANCE Positive ACTUAL (Negative) 2.071.872 $ (23.485) 10.630 (34.370) 2.082.502 (57.855) 2.279.557 115.519 ( 197.055) 57.664 1.337.329 (42.31 0) 1.140.274 $ 15.354 REVENUES Taxes Fines and Forfeitures Inve stment Income TOTAL REVENUES EXPENDITURES Current Police NET CHANGE IN FUND BALANC E FUND BALANCE. Beginning FUND BALA CE. En ding CITY OF WHEAT RIDGE , COLORADO BUDGETARY COMPARISON SCHEDULE CRIME PREVENTION FUND Year Ended December 31 , 2013 ORIGINAL FINAL BUDGET BUDGET $ 271 ,800 $ 271 ,800 35 ,000 35.000 1,000 1.000 307,800 307.800 348.297 371.609 (40,497) (63.809) 211.701 291.879 $ 171 ,204 $ 228,070 See the accompanying Independent Auditors' Report . 27 VARIANCE Positive ACTUAL (Negative) $ 326.566 $ 54 ,766 32.417 (2 ,583) 1.058 58 360.041 52.241 371.609 (11.568) 52,241 291.879 $ 280.311 $ 52.241 REVE UE Taxes Charges for Services Inve stment Income Miscellaneous TOTAL REVE UES ETCHA GEl FUNDBALA CE FUND BALA CE. Beginning FUND BALA CE. Ending CITY OF WHEAT RIDGE. COLORADO BUDGETARY COMPARISON SCHEDULE PUBLIC ART FUND December 3 I. 20 13 ORIGINAL AND FINAL BUDGET $ 2.000 1,200 75 50.000 53.275 53.275 13.5 34 $ 66.809 ee the accompanying Independent Auditors' Report . 28 VARIANCE Positive ACTUAL (Negative) $ 5.381 $ 3.381 4,765 3.565 104 29 14 .000 (36.000) 24 .2 50 (29.025) 24.250 (29.025) 13.956 422 $ 38 .206 $ {28.603} REVENUES Taxes Intergovernmental Charges for Services Investment Income Miscellaneous TOTAL REVENUES EXPE DITURES Capital Outlay EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES Transfers In NET CHANGE IN FUND BALANCE FU D BALANCE, Beginning FUND BALANCE, Ending CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARJSON SCHEDULE CAP.ITAL PROJECTS FUND Year Ended December 3 .I , 2013 ORIGINAL FINAL BUDGET BUDG ET $ 180 ,000 $ 180,000 8.497.000 8,497 ,000 100,000 100,000 8.777,000 8.777.000 13.092,000 13 ,791,503 ( 4.3 15 ,000) (5.0 14.503) 860.000 860.000 (3.455,000) ( 4.1 54.503) 3,479,917 4,172,433 $ 24,917 $ 17.930 See the accompanying Independent Auditors' Report. 29 VARIANCE Positive ACTUAL (Negative) $ 217,710 $ 37.710 4.403.064 ( 4,093.936) 7 ,678 7,678 34 ,241 (65. 759) 37.082 37 ,082 4,699.775 ( 4.077 .22 5) 7.320 ,167 6.471.336 (2 ,620,392) 2.394.111 860,000 (I ,760,392) 2.394 , Ill 4,172.433 $ 2,412.041 $ 2,394 , Ill REVEN UE Inve stment Income OTIIER Fl A CING SOURCES Transfers In ETC IIA GEl FUND BALA CE FUND BJ\LA CE. Beginning FUN D BALA CE. End in g CITY OF WHEAT JUDGE. COLORADO BUDGETARY COMPARISO SCHEDULE EQUIPMENT REPLACEMENT FUND Year En ded December 3 I. 2013 ORIGINAL AND FINAL BUDGET $ 1.000 100.000 I 01.000 270.069 $ 37 1.069 See the accompanying Independent Auditors' Report . 30 $ $ VARIANCE Positive ACTUAL (Nega tive ) (1.712) $ (2 .712) 100.000 98.288 (2. 712) 270.317 248 368.605 $ (2.464) ASSETS Cash and In vestments Property Taxes Receivable Intergovernmental Receivables Property Held for Resale TOTAL ASSETS LIABILITIES Accounts Payable Due to Primary Government TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURC ES Property Taxes FUND BALANCE Nonspendable Property Held for Resale Unrestricted, Unassigned TOTAL FUND BALANCE CITY OF WHEAT RlDGE, COLORADO BALANCE SHEET COMPONENT UNIT December 3 1,2013 TOTAL LIABILITIES. DEFERRED INFLOWS OF RESOURCES. AND FUND BALANC E Amounts Reported for the Component Unit in the Statement ofNet Po s ition are Different Becau e : Total Fund Balance of Component Unit Long-term liabilities are not due and payable in the current year and, therefore, are not reported in governmental funds . Total Net Position of Component Unit See the accompanying Independent Auditors' Report. 3 1 URBAN RENEWAL AUTHORITY $ 2,019.047 14 ,16 3 77 ,542 1,680,299 $ 3.79 1.051 $ 38.837 2,53 1,038 2.569,875 14 ,163 1,680 ,299 (473 ,286) 1,207.013 $ 3.791 ,051 $ 1,207.013 (2,27 1,115 ) $ {1064.1 02) REVENUES Property Tax In crement Sales Tax In crement In vestment Income Mi cellaneous TOTAL REVE UES EXPE DITURES Current Community Development Capital Outlay Debt Service Principal Interest TOTAL EXPENDITURES NET CHANGE IN FUND BALANCE F D BALA CE. Beginning FUND BALA CE. Ending CITY OF WHEAT RIDGE. COLORADO STATEMENT OF REVENUES EXPE DITURES A D CHANGES IN FUND BALANCE COMPONENT UNIT Year Ended December 3 I. 20 13 Amounts Reported for the Component Unit in the Statement of Ac tivities are Different Because: Net Change in Fund Balance of Component Unit Repayments of long-term debt are expenditures in governmenta l funds. but the repayment reduces long-term liabilities in the statement of net position and does not affect the statement of activities . This amount represents loan payments in the current year. Change in et Position of Component Unit See the accompanying Ind ependent Auditors' Report. 32 URBAN RENEWAL AUTIIORITY $ 13.606 498.613 17.345 1.250 530.814 28.778 139.102 196.532 96.142 460.554 70.260 1.136.753 $ 1.207.013 $ 70.260 196.532 $ 266.792 R EVENU ES Taxes Investment Income CITY OF WHEAT RIDGE. COLORADO BUDGETARY COMPARISON SCHEDULE WHEAT RlDGE URBAN RENEWAL AUTHORITY Year Ended December 3 I. 2013 ORIGINAL AND FINAL BUDG ET $ 432.900 5,000 Proceeds from Sale of Property Held for Resale 730,000 Mi scellaneous 195,000 TOTAL REVENU ES 1.362 ,900 EX PEN DITURES C urrent Community Development 78.100 Capital Outlay 382,900 De bt Service Principal 546.532 Intere st 96,142 TOTAL EXPENDITURES 1,103 .674 NET CHANGE IN FUND BALANCE 259,226 FU D BALANC E. Beginning 218,203 FUND BALANC E. Ending $ 477 ,429 See the accompanying Independent Auditors' Report . 33 VARIANC E Positive ACTUAL (Negative) $ 512,219 $ 79.319 17.345 12.345 (730.000) 1,250 (193,750) 530,814 (832.086) 28.778 49.322 139 ,102 243.798 196,532 350.000 96 ,142 460,554 643.120 70,260 (I 88 .966) I. I 36,753 918 ,550 $ 1,207.013 $ 729,584 COMPLIANCE SECTION --8f--7&C Swanhorst & Company LLC Cenincd Publ ic: Accountanu Honorable Mayor and Members of the City Council City of Wheat Ridge Wheat Ridge, Colorado INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MA TIERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards . issued by the Comptroller General of the United States, the financial statements of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Wheat Ridge as of and for the year ended December 31, 2013 , and the related notes to the financial statements, which collectively comprise the basic financial statements of the City of Wheat Ridge , and have issued our report thereon dated July 21 , 2014. Internal Control Over Financial Reporting In planning and performing our audit ofthe financial statements, we considered the City of Wheat Ridge's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Wheat Ridge 's internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Wheat Ridge 's internal control over financial reporting . A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent , or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City of Wheat Ridge 's financial statements will not be prevented, or detected and corrected, on a timely basis . A significant deficiency is a deficiency , or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance . Our consideration of the City of Wheat Ridge's internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies . Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses . However, material weaknesses may exist that have not been identified . 8400 E. Crescent Parkway • Suite 600 • Greenwood Village , CO 80111 • (720) 528-4306 Fax: (720 ) 528-4307 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Wheat Ridge's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion . The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose oftbis Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Wheat Ridge's internal control or on compliance . This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Wheat Ridge's internal control and compliance. Accordingly, this report is not suitable for any other purpose . ~~tt:hufJ~U0 July 21,2014 35 --+8--:~&C Swanhorst & Company LLC Cenificd Pub lic Accownants Honorable Mayor and Members of the City Council City of Wheat Ridge Wheat Ridge, Colorado INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM, INTERNAL CONTROL OVER COMPLIANCE, AND THE SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS REQUIRED BY OMB CIRCULAR A-133 Report on Compliance for Each Major Federal Program We have audited the City of Wheat Ridge's compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-1 33 Compliance Supplement that could have a direct and material effect on each of the City of Wheat Ridge's major federal programs for the year ended December 31, 2013. The City of Wheat Ridge 's major federal programs are identified in the summary of auditors ' results section of the accompanying schedule of findings and questioned costs . Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations , contracts and grants applicable to its federal programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the City of Wheat Ridge's major federal programs based on our audit of the types of compliance requirements referred to above . We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133 , Audits of States, Local Governments, and Non-Profit Organizations . Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Wheat Ridge's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program . However, our audit does not provide a legal determination of the City of Wheat Ridge's compliance. Opinion on Each Major Federal Program In our opinion, the City of Wheat Ridge complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2013 . 8400 E. Crescent Parkway • Suite 600 • Greenwood Village , CO 80111 • (720 ) 52 8-4306 Fax : (720 ) 52 8-4 307 Report on Internal Control Over Compliance Management of the City of Wheat Ridge is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above . In planning and performing our audit of compliance, we considered the City of Wheat Ridge's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Wheat Ridge's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected , on a timely basis. A significant deficiency in internal control over compliance is a deficiency , or combination of deficiencies , in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance . Our consideration of the City of Wheat Ridge's internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and , therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item 2013-1, that we consider to be a significant deficiency. The City of Wheat Ridge's response to the internal control over compliance finding identified in our audit is described in the accompanying corrective action plan . The City of Wheat Ridge's response was not subjected to the auditing procedures applied in the audit of compliance and , accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements ofOMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of the governmental activities , the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Wheat Ridge as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the basic financial statements of the City of Wheat Ridge. We issued our report thereon dated July 21 , 2014, which contained unmodified opinions on those financial statements . Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Wheat Ridge's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling the information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. ln our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole. &w~~44p-~ July 21,2014 37 CITY OF WHEAT RIDGE , COLORADO SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 3 I , 2013 Summary of Auditors' Results Financial Statem ents Type of auditors' report issued : unmodified lnternal control over financial reporting : • Material weaknesses identified? • Significant deficiencies identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? F ederal Awards lnternal control over major programs: • Material weaknesses identified? • Significant deficiencies identified that are not considered to be material weaknesses? ____ yes ____ yes ____ yes ____ yes _---.:.:x __ yes Type of auditors ' report issued on compliance for major programs: unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) ofOMB Circular A-133? Identification of major program: 20.205 Highway Planning and Construction Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? Financial Statement Findings _---.:.:x __ yes ____ yes _ ___:.:x __ no _ ___:.:x __ none reported _ ___;,ox __ no _ ___;,ox __ no ____ none reported ____ no _-.:..:x __ no The audit of the financial statements did not disclose significant deficiencies in internal control that would be considered material weaknesses, and did not disclose fraud , violations of provisions of contracts and grant agreements, or abuse that were material to those fmancial statements . (Continued) 38 CITY OF WHEAT RIDGE , COLORADO SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended December 31, 2013 Federal Awards Findings and Questioned Costs 2013-1 Internal Control over Compliance with Davi -Bacon Act U.S. Department of Transportation Passed through Colorado Department of Transportation CFDA 20.205 Highway Planning and Construction Criteria Condition Context Effect Cause Recommendation For construction projects subject to the Davi -Bacon Act, all laborers and mechanics employed by contractors or subcontractors with construction contracts in excess of $2,000 financed by federal assistance must be paid wages not less than those established by the Department of Labor for the locality of the projects. The City received federal assistance for construction projects subject to the Davis-Bacon Act. A project manager was hired to oversee the construction projects. However, neither the City or the project manager reviewed the ce11ified payrolls submitted by the contractors. Our inquiries of City personnel and the project manager indicated that certified payrolls were submitted by the contractors. However, the certified payrolls were not reviewed by the City or the project manager for compliance with the prevailing wage rates established by the Department of Labor. Wages paid to laborers and mechanics employed by the City's contractors and subcontractors may not comply with federal regulations. This increases the risk that substandard work could be performed . City per onnel relied on the project manager to monitor compliance with federal regulations . Communication between City personnel and the project manager may not have been clear enough to adequately establish the expectations of both parties. When the City receives federal assistance, internal controls s hould be established to ensure compliance with all applicable federal regulations. Specifically, when projects are subject to the Davis-Bacon Act, the construction contracts should include prevailing wage rate clauses and contractors or subcontractors should submit weekly certified payrolls. The City should then establish monitoring procedures to detennine that laborers and mechanics were paid the prevailing wage rates. Views of Responsible Officials and Planned Corrective Actions See the accompanying Corrective Action Plan. 39 CITY OF WHEAT RIDGE , COLORADO CORRECTIVE ACTION PLAN Year Ended December 31, 2013 2013-1 Internal Control over Compliance with Davis-Bacon Act City staff have put into place internal controls to ensure that the necessary documentation required for wage compliance is accurate and complete. 40 CITY OF WHEAT RIDG E. COLORADO SCHEDULE OF EXPEND ITUR ES OF FEDERAL A WARDS Year Ended December 3 1. 2013 Federal Grantor/Pass-Through G ran:..::.to-'-r/-'-P.__ro'-"g"-ra"-m ____ T_it"-le=------------------- l i.S. Environmental Protection Agency Brownfield Assessment and Cleanup Cooperative Agreements Executive Office of the !•resident Pas ed through City of Lakewood lli gh Intensity Drug Trafficking Areas Program l i.S. Department of Justice Edward Byrne Memorial Justice Assistance Grant Bulletproof Vest Partnership Program Public Safety Partnership and Community Policing Grants TOTAL .. DEPARTME TOF JUSTICE li.S. J)epartment of Transportation Passed through Colorado Department of Transportation Highway Planning and Construction TOTAL FEDE RAL Fl A C IA L AS ISTA CE See the accompanying Ind ependent Auditors' Report. 41 Federal CFDA umber 66.818 95.00 1 16.738 16.607 16.710 20.205 $ $ Disbursements 103.879 3.768 27.604 4.229 128.777 160.610 3.153.064 3.42 1.32 1 NOTE 1: CITY OF WHEAT RIDGE, COLORADO NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended December 31 , 20 13 BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards is presented in accordance with the requirements of OMB Circular A-133 , Audits of States , Local Governments, and Non-Profit Organizations , using the accrual basis of accounting. Therefore, some amounts presented in this schedule may differ from amounts presented in the financial statements. 42 STATE COMPLIANCE .... ~I.~ ... _ .-City of • :rwheat:R.l_dge ITEMNO: 3 DATE: July 28 , 2014 REQUEST FOR CITY COUNCIL ACTION TITLE: RESOLUTION NO. 43-2014 - A RESOLUTION AMENDING THE FISCAL YEAR 2014 GENERAL FUND BUDGET TO REFLECT THE APPROVAL OF A SUPPLEMENTAL BUDGET APPROPRIATION IN THE AMOUNT OF $37,000 FOR THE PURPOSE OF FUNDING CURRENT ENHANCED SALES TAX INCENTIVE PROGRAM AGREEMENTS PAYMENTS D PUBLIC HEARING D BIDS /MOTIONS IZI RESOLUTIONS D ORDINANCES FOR 1ST READING 0 ORDINANCES FOR 2ND READING QUASI-JUDICIAL: D YES Cie.~ IZI NO ISSUE: In the 2014 budget, $103 ,000 was budgeted for Enhanced Sales Tax Incentive Program (ESTIP) payments for five agreements approved by City Council. Sales tax increment revenues for these agreements have exceeded this estimate and additional funding in the amount of$37,000 is needed to satisfy the City 's obligations for 2014 ESTIP payments . PRIOR ACTION: The Council approved the following ESTIP Agreements that are partially payable in fiscal year 2014 : • Dillon Companies (King Soopers)-June 25 , 2012 • Walrus 5560 (West 29 Restaurant)-September 24 , 2012 • Liquid Artworks Colorado Plus -January 28 , 2013 • Taste of Home Cooking -September 9, 2013 • Muscle Masster (Green Herb)-September 9 , 2013 Supplemental Budget ESTIP July 28 , 2014 Page2 FINANCIAL IMPACT: This supplemental budget appropriation will increase the ESTIP program budget by $37 ,000. However, revenues from the ESTIP program are estimated to increase by the same amount so the impact to the General Fund reserves will be zero. BACKGROUND: In 2002 , the Wheat Ridge Code of Laws established the ESTIP , as defined in chapter 22 , division 5, section 22-73. The goal of the program is to provide incentives that will encourage the development of private sector jobs, revitalize deteriorating areas ofthe City, increase sales tax revenues , provide new or enhanced public improvements , and encourage the development, redevelopment and expansion of businesses within the City. ESTIP provides an incentive for new business development or the expansion of existing sales tax producing businesses. The ESTIP rebates a portion or all of the sales tax increment generated by a specific project for a specified period oftime with a maximum amount that can be rebated . Increment is defined as sales tax re venues generated o ver a base level. The base level is calculated by using the previous 12 months of sales tax generation at that specific property. Any sales tax above that defined base level is considered the increment and can be rebated back to the business. There are five current ESTIP agreements that have been appro v ed b y City Council. Each ESTIP agreement has unique tenns and each has various due dates for reimbursement by the City. Staff is preparing to make distributions of funds to Dillon Companies (King Soopers) and Liquid Artworks Colorado Plus . Both businesses have exceeded the estimated sales tax increment for 2014. While $103 ,000 was budgeted for all ESTIP agreements , these two payments total just over $125 ,000 . An additional $15 ,000 of sales tax increment is estimated for the other three ESTIP agreements. Therefore, staffhas estimated a total of$140,000 in ESTIP incentive rebates in 2014 which requires a $3 7,000 supplemental budget appropriation to meet this obligation. RECOMMENDATIONS: Staff recommends approval ofthe supplemental budget request in the amount of$37 ,000. RECOMMENDED MOTION: "I move to approve Resolution No . 43-2014, a resolution amending the fiscal year 2014 general fund budget to reflect the approval of a supplemental budget appropriation in the amount of $37 ,000 for the purpose of funding current ESTIP agreements payments ." Or, "I move to postpone indefinitely the approval of Resolution No. 43-2014, a resolution amending the fiscal year 2014 general fund budget to reflect the approval of a supplemental budget appropriation in the amount of$37,000 for the purpose of funding current ESTIP agreements payments for the following reason(s) " Supplemental Budget ESTIP July 28, 2014 Page 3 REPORT PREPARED/REVIEWED BY: Steve Art , Economic Development and Urban Renewal Manager Patrick Goff, City Manager/URA Executive Director ATTACHMENTS: 1. Resolution No. 43-2014 CITY OF WHEAT RIDGE, COLORADO RESOLUTION NO. 43 Series of 2014 TITLE: A RESOLUTION AMENDING THE FISCAL YEAR 2014 GENERAL FUND BUDGET TO REFLECT THE APPROVAL OF A SUPPLEMENTAL BUDGET APPROPRIATION IN THE AMOUNT OF $37,000 FOR THE PURPOSE OF FUNDING CURRENT ENHANCED SALES TAX INCENTIVE PROGRAM AGREEMENTS PAYMENTS WHEREAS, the City has adopted as a portion of the Wheat Ridge Code of Laws ("Code") Chapter 22, Division 4, "Enhanced Sales Tax Incentive Program" (ESTIP) to encourage, in part, continued development and expansion of opportunities for employment in the private sector in the City; and WHEREAS, the City Council approved ESTIP agreements with Walrus 5560, The Dillon Companies, Colorado Plus Liquid Art Works, Muscle Masster, and A Taste of Home Cooking to rebate back portions of sales tax increment generated from these businesses; and WHEREAS, sales tax increment revenues have exceeded budget appropriations; and WHEREAS, increased funding in the General Fund budget is necessary to meet the 2014 ESTIP payment obligations. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Wheat Ridge, Colorado, as follows: A. The City Council authorizes a supplemental budget appropriation in the amount of $37,000 from the General Fund undesignated reserves to account number 01- 105-700-719 and amendment of the 2014 fiscal year revenues accordingly. DONE AND RESOLVED this 28th day of July, 2014. Joyce Jay, Mayor ATTEST: Janelle Shaver, City Clerk Attachment 1 ... ~~~ .... _ .-City of • JP'Wheat_Ri_dge ITEM N 0: ___j__ DATE: July 28 ,2014 REQUEST FOR CITY COUNCIL ACTION TITLE: MOTION TO APPROVE PAYMENT TO DILLON COMPANIES IN THE AMOUNT OF $107,108.23 FOR THE 12-MONTH PERIOD ENDING JUNE 30, 2014 IN ACCORDANCE WITH AN ENHANCED SALES TAX INCENTIVE PROGRAM AGREEMENT D PUBLIC HEARING [g] BIDS/MOTIONS D RESOLUTIONS ISSUE: D ORDINANCES FOR 1ST READING 0 ORDINANCES FOR 2 ND READING [g] NO City Council approved an Enhanced Sales Tax Incentive Program (ESTIP) Agreement with Dillon Companies (King Soopers) in 2012 . The first 12-month period of the Agreement ended on June 30 ,2014 . A total of$107,108.23 in sales tax increment was generated over this period of time and is due to Dillon Companies in accordance with the Agreement. FINANCIAL IMPACT: The 2014 budget includes a total of$103 ,000 to fund all active ESTIP Agreements payments in 2014. It is estimated that the total sales tax increment for all Agreements in 2014 will total $140,000 . A supplemental budget appropriation in the amount of $3 7,000 will be required to satisfy the sales tax increment payments to Dillon Companies and all other ESTIP Agreements in 2014 . A balance of $192 ,891 .77 will remain on the Dillon Companies Agreement or six years , whichever occurs first. BACKGROUND: In 2002 , the Wheat Ridge Code of Laws established the ESTIP , as defined in chapter 22 , division 5, section 22-73 . The goal of the program is to provide incenti ves that will encourage the development of private sector jobs, revitalize deteriorating areas ofthe City, increase sales Dillon Companies ESTIP July 28 , 2014 Page2 tax revenues, provide new or enhanced public improvements, and encourage the development, redevelopment and expansion of businesses within the City. ESTIP provides an incentive for new business development or the expansion of existing sales tax producing businesses. The ESTIP rebates a portion or all of the sales tax increment generated by a specific project for a specified period of time with a maximum amount that can be rebated. Increment is defined as sales tax revenues generated over a base level. The base level is calculated by using the previous 12 months of sales tax generation at that specific property. Any sales tax above that defined base level is considered the increment and can be rebated back to the business . The City entered into an ESTIP Agreement with Dillon Companies on June 25 ,2012 for a rebate of 1 00% of the sales tax increment that would be generated from a proposed remodel of the King Soopers grocery store at 38 111 and Sheridan . The ESTIP Agreement is for a period of seven years with a maximum rebate of$300,000. The City has been collecting and tracking the sales tax increment for one year. Sales tax receipts have exceeded staffs estimate for the first full year of the Agreement. In the first year of the ESTIP Agreement, King Soopers generated over $107 ,000 in sales tax increment. RECOMMENDATIONS: Staff recommends payment of the 2013 /2014 sales tax increment m the amount of $107 ,108.23 to Dillon Companies. RECOMMENDED MOTION: "I move to approve payment to Dillon Companies in the amount of $107 ,108.23 for the 12- month period ending June 30, 2014 in accordance with an enhanced sales tax incentive program agreement." Or, "I move to deny payment to Dillon Companies in the amount of$107,108.23 for the 12-month period ending June 30, 2014 in accordance with an enhanced sales tax incentive program agreement for the following reason(s) " REPORT PREPARED/REVIEWED BY: Steve Art, Economic Development and Urban Renewal Manager Patrick Goff, City Manager ATTACHMENTS 1. Dillon Companies ESTIP Agreement AGREEMENT PURSUANT TO ENHANCED SALES TAX INCENTIVE PROGRAM This Agreement Pursuant To Enhanced Sales Tax Incentive Program (this "Agreement") is made and entered into as of the 25th day of June, 201 2, by and between DilJon Companies, Inc., a Kansas Corporation (dba King Soopers), for the store located at 3817 Sheridan Blvd in the City of Wheat Ridge, Colorado, hereinaft.er referred to as the "Owner" and the CITY OF WHEAT RIDGE, COLORADO, hereinafter referred to as the .. City," collectively the "Parties," and each individually, as a "Party." RECITALS: Whereas the City bas adopted Chapter 22, Article 69 -84 of the Wheat Ridge Code of Laws, entitled the Enhanced Sales Tax Incentive Program (the "ESTIP Program"), a copy of which is attached hereto as Exhibit A, to encourage, in part, the establishment of retail sales tax generating businesses within the City; and Whereas, the Owner desires to participate in the ESTIP Program and to share in the enhanced sales taX derived from the property described as a Grocery Store, generally located at 3817 Sheridan Boulevard in Wheat Ridge, Colorado and more particularly described in Exhibit B, attached hereto and incorporated by this reference (the ''Property"), for the installation of Public Improvements described in Exhibit C, attached hereto and incorporated by this reference (the "Public hnprovements") to the extent allowed by this Agreement and the ESTlP Program. NOW, THEREFORE, in consideration of the foregoing premises and the covenants, promises, and agreements of each of the Parties hereto, to be kept and preformed by each of them the Parties agree as follows: 1. Recitals. The Recitals set forth above are incorporated in this Agreement by reference. 2. Term. The tenn of this Agreement shall commence on the first day of the calendar month following the month in which the Owner receives their Certificate of Occupancy on the Property or June 30, 2013 whichever shall occur first (the "Commencement Date") and shall tenninate on the one (1) year anniversary date of the Commencement Date, uoJess otherwise provided in this Agreement (the "Term"). The Term may be renewed by up to SIX (6) one (l) year periods (the "Extended Tenn'~. The Term of this Agreement shaU automatically renew for each additional one year period to the extent required by Section 4(d) hereof. 3. Application of City Code. This Agreement is subject to the limitations of the ESTIP Program, as found in the City of Wheat Ridge Code of Laws. In the event of conflicts between this Agreement and the ESTlP Program, the ESTIP Program shall control. Attachment 1 4. Qualification of Property for the ESTIP Program. The City agrees that the Property qualifies for the ESTIP Program and the Public Improvements are improvements for public and/or public related purposes that will stimulate the economy of and within the City, provide employment opportunities for residents of this City and others, expand the goods available for purchase and consumption by residents of the City, and increase sales taxes collected by the City. The City finds the business is reasonably likely to generate enhanced sales taxes of at least One Hundred Eighty-Nine Thousand do11ars ($189 ,000) over the full term of this Agreement. The following provisions shalJ apply for each year in which the ESTIP Program is in effect for the Property: a. One Hundred percent (I 00%) of the "Enhanced Sales Taxes" collected by the City and derived from the Property shaH be segregated by the City to be utilized for the ESTIP Program herein established and approved (the "Allocated Revenues"). For purposes of this Agreement "Enhanced Sales Taxes" shall have the meaning set forth in the ESTIP Program at Section 22-75 ofthe Wheat Ridge Code of Laws. b. The amount of Enhanced Sales Taxes shall be calculated as follows: the actual amount of sales taxes collected on the Property during the period July 1, 201 1 to June 30, 2012 (the "base amount"), shall be subtracted from the actual amount of sales taxes collected annually commencing after: (i) the first day of the calendar month fo1lowing the month in which the Owner receives their certificate of occupancy on the Property, or (ii) June 30, 2013, whichever occurs first. The excess of collections in each such year above the base amount shail be the Enhanced Sales Taxes for that year. c. The Owner shall share in the Enhanced Sales Taxes derived from the Property and the business located thereon as provided herein. d. Enhanced Sales Taxes from the Property shall be shared and the Allocated Revenues shall be disbursed to the Owner on an annual basis with sales taxes collected on and after the Commencement Date. The maximum period of time that this Agreement shall be in effect shall be the earlier of: (i) SEVEN (7) years, commencing on the Commencement Date, or (ii) until the sum of THREE HUNDRED THOUSAND Dollars ($300,000.00) in Enhanced Sales Taxes (the "Maximum Amount'') has been paid to Owner for reimbursement for such improvements, whichever occurs first, at which time this Agreement shall terminate. It is expressly understood by the Parties that this Agreement will terminate upon the occurrence of the earlier to be reached of the maximum time as provided in the preceding sentence (whether or not the Maximum Amount has been reached) or the disbursement of the Maximum Amount as provided in the preceding sentence (whether or not the maximum time set forth has expired). 2 Notwjthstanding the foregoing, the Tenn will be automatically extended for one year for up to six (6) additional one (1) year periods if the Maximum Amount has not been disbursed during the Extended Term because the City Council has not appropriated the funds as provided in Paragraph 5 of this Agreement. e. This Agreement is a personal agreement between the City and the Owner and does not run with the Owner's property interest in the land. The obligations, benefits and/or the provisions .of thls Agreement may not be assigned in whole or in part without the express authorization of the City Council, acting in its sole and exclusive discretion and no third party shall be entitled to rely upon or enforce any provisions hereon. Notwithstanding the foregoing, Owner may assign its interests in thls Agreement to an affiliate or to a successor by consolidation. For the purposes of this Paragraph, an affiliate means an entity which controls, is controlled by, or is under common control with the Owner. This Agreement shalJ never constitute a debt or obligation of the City within any constitutional or statutory provision. f. Any Enhanced Sales Taxes subject to the Agreement shall be escrowed in th.e event there is a legal challenge to the ESTIP Program or to the approval of this Agreement. g. At the end of the Tenn of this Agreement as provided for herein, any monies segregated by the City which have not been expended as hereunder provided may be transferred to another account of the City or used in a manner determined by the City in its sole discretion, excluding any amounts escrowed under Paragraph 4.fabove. h. From the Enhanced Sales Tax proceeds segregated by the City, the City shall pay to the Owner the actual cost incurred by the Owner for the construction and installation of the Public Improvements beginning at the time that all of the Public Improvements are substantially completed, but not to exceed the Maximum Amount defined in Paragraph 4.d above and set forth in Exhibit C. 1. In order to obtain reimbursement for such actual costs, the Owner shall submit invoices to the City after the Effective Date of this Agreement, the payment of which shall be subject to the City's approval for compliance of the expenditures with this Agreement and the ESTIP Program and the availability of Allocated Revenues. Each invoice presented to the City by the Own.er shall be accompanied by an affidavit or other supporting documentation from the general contractor stating: 1. that said improvements have been substantially completed pursuant to plans and specifications approved by the City through the issuance of pennits and site plan approvals by the City in the ordinary course; and 11. that the Owner has paid the full amount specified on the invoice. 3 J· The Owner shall be deemed the "owner or proprietor" of the Property for the purposes of this Agreement and the ESTIP Program, whether or not the Owner owns aJI or any portion of the Property at any relevant time, since the Owner is coordinating the installation of the Public Improvements. S. City's Budget Process. Each year, the City Manager shall include in a budget presented to the City Council pursuant to Chapter X, Sec. 1 0.2 of the Wheat Ridge Home Rule City Charter, the appropriation of the Allocated Revenues for payment to the Owner as provided in this Agreement. Nothing in this Agreement shall be construed as obligating the City Council to appropriate the Allocated Revenues in any fiscal year. 6. No Debt or Pecuniary Liability. Notwithstanding anything in the Agreement to the contrary, the Agreement is specifically subject to annual appropriation of sufficient funds to pay the Allocated Revenue as provided in the ESTIP Program. No multiple year fiscal obligation is created hereby. The decision of the City Council not to appropriate funds in any given year shall not affect, impair or invalidate any of the remaining provisions of this Agreement. None of the obligations of the City hereunder shall be payable from any source other than Enhanced Sales Taxes. 7. Subordination. Notwithstanding anything in this Agreement to the contrary, the Owner shal1 have no right, claim, lien, or priority, in or to the City's sales tax revenue that would be superior to or on parity with the rights, claims, or liens of the holders of any sales tax revenue that would be bonds, notes, certificates, or debentures payable from or secured by any sales taxes, outstanding as of the Effective Date of this Agreement. All rights of the Owner are, and at all time shall be, subordinate and inferior to the rights, claims and liens of the holders of any and all such sales tax revenue bonds, notes, certificates, or debentures, issued by the City and payable from or secured by any sales taxes. 8. No Covenant to Construct or to Open. The intent of this Agreement is to provide for Owner's participation in the ESTIP Program, in the event that Owner constructs the Public Improvements or to operate the same once completed or otherwise. Notwithstanding any provision in this Agreement to the contrary Owner shall have no obligation under this Agreement to construct the Public Improvements, and in that event, the City shall have no obtigation to share any of the Enhanced Sales taxes with Owner. 9. Remedies. The Owner waives any constitutional claims against the City arising out of a breach of this Agreement. The Owner's remedies against the City under this Agreement are limited to breach of contract claims. In no event shall the Owner be entitled to a claim, nor shall the City be liable for, any special, exemplary, punitive or consequential damages of any kind, including economic damages or lost profits. 4 10. Severabnity. It is understood and agreed by the Parties that if any part, term or provision of this Agreement is held by the courts to be illegal or in conflict with any law of the State of Colorado, the validity of the remaining portions or provisio.ns shall not be affected, the rights and obligations of the Parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be invalid, and the Parties shall cooperate to cure any legal defects in the Agreement or the ESTIP. Should the allocation of the Enhanced Sales Tax, or the payment of the AUocated Revenues be judicially adjudged illegal, invalid or unenforceable under the present or future Jaws effective during the Tenn of this Agreement by a court of competent jurisdiction in a final, non-appealable judgment, the Parties shaJJ utilize their best, good faith efforts to restructure this Agreement or enter into a new agreement consistent with the purposes of this Agreement. Should the Parties be unsuccessful in their efforts, the Agreement shall terminate without penalty or recourse to the City. 11. Governing Law. The laws of the State of Colorado shall govern the validity, perfonnance and enforcement of this Agreement. Should either Party institute legal suit or action for enforcement of any obligation contained herein, it is agreed that venue of such suit or action ·shall be proper and exclusive in the district court for Jefferson County, Colorado. 12. Notices. All notices required or pennitted under this Agreement shall be in writing and shall be hand delivered or sent by certified mail, return receipt requested, postage prepaid to be addressed to the Parties set forth below. All notices so given shall be considered effective upon the earlier of the actual receipt or seventy-two (72) hours after deposit in the United States Mail with the proper address. Either Party by notice so given may change the address to which future notices sbalJ be sent: Notice to the City: Copy to: Notice to the Owner: City Manager City of Wheat Ridge 7500 W. 291h Avenue Wheat Ridge, CO 80033 City Attorney City of Wheat Ridge 7500 W. 29th Avenue Wheat Ridge, CO 80033 Dillo.n Companies, Inc. dba King Soopers Attention: Real Estate Department 65 Tejon Street Denver, CO 80223 5 EXBffiiTA Ordinance 2001-08 The Enhanced Sales Tax Incentive Program (The "ESTlP Program,) See. 22-73. -Program established. There is hereby established within the city an enhanced sales tax incentive program. (Ord. No. 1988-758. § 1(24-1), 5-23-88: Ord. No. 1272 .. ~·1. 12-9-02) See. 22-74. -Purpose. The purpose of the enhanced sales tax incentive program created by this division is to encourage the establishment and/or substantial expansion of retai l sales tax generating businesses within the city, thereby stimulating the economy of and within the city, thereby providing employment for residents of the city and others, thereby further expanding the goods available for purchase and consumption by residents of the city, and further increasing the sales taxes collected by the city, which increased sales tax collect ions will enable the city to provi de expanded and improved municipal services to and for the benefit of the residents of the city, while at the same time providing public o r public--related improvements at no cost , or at deferred cost , to the city and its taxpayers and residents . (Ord. No. 1988-758, § 1(24-2). 5-23-88: Orll. No. 1272. § J, 12-9-02) Sec. 22-75.-Definitions. The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Enhanced sales tax shall mean the amount of sales tax collected by tl1e city over and above a base amount negotiated by, and agreed upon by, the applicant and the city, and which amount is approved by the city council , which base amount shall never be lower than the amount of sales taxes collected by the city at the property in question in the previous twelve ( 12) months plus a reasonable and agreed upon percentage of anticipated increase in sales taxes, or, in the case of a newly established business, an amount which represents the good faith detennination by the applicant and the city as to the amount of sales taxes which could be generated from the new business without the participation by applicant in the ESTIP created under this division. ESTJP means the enhanced sales tax incentive program created under this division . 8 Owner or proprietor shall mean the record owner or operator of an individual business , or, in the case of a shopping center, the owner of the real property upon which more than one (J) business is operated, provided that the owner (whether an individual, corporation, partnership or other entity) is the owner or less or of the individual businesses operated thereon. (Ord. No. 1988-758, § 1(24-3), 5-23·88; Ord. No. 1272, § 1. 12·9-02) Sec.. 22-76. -Participation. Panicipation in ESTIP shall be based upon approval by the city council exercising its legislative discretion in good faith. Any owner or proprietor of a newly established or proposed retai l sales tax generating business or location, or the owner or proprietor of an exist ing retail sales tax generating business or location which wishes to expand substantially, may apply to the city for incJusion within the ESTIP provided that the new or expanded business is reasonably likely to generate enhanced sales taxes of at least five thousand doUars ($5 ,000.00) in the first year of operation. (Ortl. No. 1988-758,. 1(24-4), 5-23-88: Ord. No. 1990-854. 1. 11-26-90: Ord. No. 1272. § 1, 12-9-02) Sec. 22-77.-Approval of agreement; use offunds generaUy. Approval by the city council of an agreement implementing this ESTIP shaU entitle the successful applicant to share in enhanced sales taxes derived from applicant's property or business in an amount which shall not in any event exceed the enhanced sales taxes ; provided, however, that applicant may use such amounts only for public and! or public-related purposes such as those specified herein and which are expressly approved by tbe city council at the time of consideration of the application. The time period in which the enhanced sales taxes may be shared shall not commence until all public or public-related improvements are completed, and shall be Jimited by the city council , in its discretion, to a specified time, or until a specified amount is reached . (Ord. No. 1988-758, § 1(24-5), 5-23-88; Ord. No. 2002-1240, § 1. 1-28-02; Ord. No. 1272. §I , 12-9-02) Sec. 22-78. -Uses enumerated. The uses to which the shared enhanced sales taxes may be put by an applicant sbaU be strictly limited to those which are public or public·related in nature . For the purposes of this division, public or public-related purposes shall mean public improvements, including but not limited to streets, sidewalks , curbs , gutters , pedestrian malls, street lights, drainage facilities , landscaping, decorative structures, statuaries , fountains , identification signs, traffic safety devices, bicycle paths , off-street parking facilities , benches, restrooms , information booths public meeting facilities, and all necessary, incidental, and appurtenant structures and improvements , together with the 9 relocation and improvement of existing utility lines, and any other improvements of a similar nature which are specifically approved by the city council upon the city council's fmding that said improvement are public or public-related improvements, and that such improvements shall enhance the competitive position of the applicant within the Denver metropolitan area marketplace. (Ord. No. 1988-758. § 1(24-6). 5-23-88: Ord. No. 1272, §I . 12-9-02) Sec. 22-79.-Increments, sharing of funds. The base figure for sales taxes shall be divided into twelve (12) monthly increments, which increments are subject to agreement between the parties, and approval by the city council , and which increments shall be reasonably related to the average monthly performance of the business or property in question, or similar businesses in the area (i.e. adjust for seasonal variations). If in any month the agreed upon figure is not met by applicant so as to create enhanced sales tax for that month, no funds shall be shared with applicant for that month, and no increment shall be shared until that deficit , and any other cumulative deficit , has been met, so that at the end of any twelve-month cycle, funds in excess of those enhanced sales taxes agreed to be shared shall not have been shared with any applicant. (Ord. No . 1988-758 .. f 1(24-7). 5-23-88: Ord. No 1272, § 1, 12-9-02) Sec. 22-80. -Revenues restricted. It is an overriding consideration and determination of the city council that existing sources of city sales tax revenues shall not be used, impaired , or otherwise affected by this enhanced sales tax incentive program. Therefore, it is hereby conclusively detennined that only enhanced sales taxes generated by the properties described in an application shall be subject to division under this ESTIP. It shall be the affirmative duty of the treasurer to collect and hold all such enhanced sales taxes in a separate account apart from the sales taxes generated by and collected from the other sales tax generating uses and businesses within the city and to provide an accounting system which accomplishes the overriding purpose of this section . It is conclusively stated by the city council that this division would not be adopted or implemented but for the provisions of this section. (Ord. No. 1988-758 .. 1(24-8). 5-23-88: Ord. No . 1272 .. I. 12-9-02) Sec. 22-81.-Capital improvement fund. The one ( 1) percent of sales and use taxes earmarked for the capital improvement fund may be utilized in this ESTIP for public improvements so long as the same are within the meaning of the phrase capital improvements as defined in the voter approved sales tax referendum previously held within the city, and provided that the same are found and detennined by the city council to be capital improvements which could be 10 provided by the city from the capital improvement fund but for the provision of such improvements by the applicant; provided, however, that such use of capital improvement funds as part of this ESTIP shall be limited to the amount agreed pursuant to section 22- 83 hereof; provided further, however, that nothing contained herein shall limit the city council in the detennination to appropriate additional capital improvement funds for capital improvements affecting the property in question as a part of the city's regular appropriation and budget process. (Ord. No . /988-758, 1(24-9), 5-23-88; Ord. No. 1272. § 1, 12-9-02) Sec. 22-82. -Criteria for approval of application. Approval of an application for inclusion in this ESTIP shall be given by the city council, at a public hearing held as a portion of a regularly scheduled city council meeting, based upon the foJiowing criteria: (I) (2) (3) (4) (5) (6) The amount of enhanced sales taxes which are reasonably to be anticipated to be derived by the city through the expanded or new retail sales tax generating business; The public benefits which are provided by the applicant through public works, public improvements, additional employment for city residents, etc; The amount of expenditures which may be deferred by the city based upon public improvements to be completed by the applicant; The conformance of the applicant's property or project with the comprehensive plan and zoning ordinances of the city; The agreement required by section 22-83 having been reached, which agreement shall contain and confonn to all requirements of section 22-83 Approval shall be by motion adopted by a majority of the entire city council . (Ord. No. /988-758. § 1(24-10), 5-23-88; Ord. No . 1272, § /, 12-9-02) Sec. ll-83. -Agreement required. Each application for approval submitted to the city council shall be subject to approval by the council solely on its own merits. Approval of an application shall require 11 that an agreement be executed by the owner and the city, which agreement shall, at a minimum, contain: (1) (2) (3) (4) (5) (6) (7) (8) A list of those public or public-related improvements which justify appHcant's approval, and the amount which shall be spent on such improvements; The maximum amount of enhanced sales taxes to be shared, and the maximum tjme during which the agreement shall continue, it being expressly understood that any such agreement shall e>.'Pire and be of no further force and effect upon the occurrence of the earlier to be reached of the maximum time of the agreement (whether or not the maximum amount to be shared has been reached) or the maximum amount to be shared (whether or not the maximum time set forth has expired); A statement that this is a personal agreement which is not transferable and which does not run with the land; That this agreement shall never constitute a debt or obligation of the city within any constitutional or statutory provision; The base amount which is agreed upon by month, and the fact that if, in any month as specified, sales taxes received from the property do not at least equal such amount, that there shall be no sharing of funds for such month; The base amount shall be agreed upon which shall consider the historic level of sales at the property in question, or a similar property within the area in the event of a new business, and a reasonable allowance for increased sales due to the improvements and upgrades completed as a result of inclusion within this program; A provision that any enhanced sales taxes subject to sharing shall be escrowed in the event there is a legal challenge to this enhanced sales tax incentive program or the approval of any application therefor; An affirmative statement that the obligations, benefits, and/or provisions of this agreement may not be assigned in whole or in any part without the 12 (9) expressed authorization of the city council, and further that no third party shall be entitled to rely upon or enforce any provision hereof; Any other provisions agreed upon by the parties and approved by the city council. (Ord. No. 1988-758, § 1(24-1 /), 5-23-88; Ord. No. 1272, § 1. 12-9-02) Sec. 22-84. -Joint venture; liability. The city council b.as enacted this ESTIP as a joint benefit to the public at. large and to private owners for the purposes of providing the city with increased sales tax revenues generated upon and by properties improved as a result of this program; public improvements being completed by private owners through no debt obligation being incurred on the part of the city, and aiJowing applicants an opportunity to improve properties which generate sales acti.vities, which improvements make those properties more competitive in the marketplace and further provide to the applicant additional contingent sources of revenues for upgrading such properties. The city council specifically .finds and detennines that creation of this ESTIP is consistent with the city's powers a s a home rule municipal corporation, and that exercise of such powers in the manner set forth herein is in furtherance oftbe public health. safety and welfare. Notwithstanding any provi sion hereof, tb.e city shalJ never be a joint venture in any private entity or activity which participates in this ESTIP, and the city shall :never be liable or responsible for any debt or obligation of any participant in E STIP . (Ord. No . 1988-758. § 1(24-12), 5-23-88; Ord. No . 1272, § 1, 12-9-02) 13 EXHWITC Qualifying Public Improvement Costs Owner public improvements are designed to provide a greater product selection to benefit the community as well as exterior improvements to enhance the property. The remodel includes new paint, decorative columns, additional entrances, resulting in a pedestrian ma11 feel , and a new and refresh store fascia on the building. Additionally the Owner plans to add a Starbucks with outdoor patio seating, which provides customers a neighborhood gathering place within the City. Owner believes that the public improvement upgrades to this specific store will better serve the existing loyal customer base in the Wheat Ridge area, attract and entice new shoppers to this store and the shopping center, and provide public benefit to the community. The contribution of $300,000 from the City will aid in the investment of over $2.1 million in building improvements. These improvements are projected to be complete by June 30,2013. With the public improvements, the Owner estimates that they can maintain their loyal customer base as well as add to that customer base in subsequent years, bringing new revenue to the City and sustaining the economic viability of the site . 15 Council Action Form-Treadmills July 28 , 2014 Page2 BACKGROUND: The current treadmills have reached their life expectancy in regard to the amount of mileage on the equipment. The frequency of the maintenance required , both in parts and manpower, has reached a point where it is no longer cost effective to maintain the equipment. Updating and replacing equipment is an important aspect of offering a high level of customer service, attracting and maintaining participation at the Recreation Center and reaching set revenue goals. RECOMMENDATIONS: Staff recommends purchase of the treadmills from Commercial Fitness Solutions, Inc. RECOMMENDED MOTION: "I move to approve payment to Commercial Fitness Solutions , Inc., in the amount of $42 ,255 for commercial treadmill equipment." Or, "I move to deny payment to Commercial Fitness Solutions Inc ., in the amount of$42,255 for commercial treadmill equipment for the following reason(s) ____________ " REPORT PREPARED/REVIEWED BY: Julie Brisson , Recreation and Facilities Manager Joyce Manwaring, Parks and Recreation Director Jennifer Nellis , Purchasing and Contracting Agent Patrick Goff, City Manager ATTACHMENTS: I. Bid Tabulation Sheet ..... , .. r Gly of '(P'WlieatR!9ge PROJECT: RFB-14-17 COMMERCIAL TREADMILL EQUIP,EMT PURCHASE AND TRADE-IN DUE DATE/TIME: WEDNESDAY, JUNE 17, 2014 BY 1 P.M. MD ' REQUESTED BY: SUSAN ANDERSON, PARKS & RECREATION 4#'1 OPENED BY: JENNIFER NELLIS, PURCHASING AGENT ~WITNESSED BY: CINDY RAIOLO, PURCHASING TECHNICIAN VENDOR Techno gym Commercial Fitness Solutions, Inc . LOCATION Fairfield, NJ littleton, CO SIGNATURE PAGE Yes Yes REFERENCES Yes Requested INSURANCE Yes Yes ACKNOWLEDGE ADDENDA (#) N/A N/A I WARRANTY INFO RMATION Yes Yes J EXTENDED WARRANTY $6,155 per year -5 yrs . $850 per unit per I $7,950 per year -7 yrs . year less 3 year I warranty for a total of $525 .00 per unit PRICING: PRICING SCHEDULE· PER UNIT COST $6,053 X 7 = $42,371 $5,858 X 7 = $41,006 DELIVERY /SHIPPING s 2,450.00 $ 1,466.00 SUBTOTAL $44 ,821 .00 $42 ,472 .00 TRADE-IN PRICING $500 ea . X 7 = $3,500 800 ea . X 7 = $5,600 SUBTOTAL $41,321.00 $ 36,872.00 INSTALLATION/REMOVAL $ -$ 1,708.00 LEAD TIME 4-6 weeks ARO 3-6weeks BID TOTAL $ 41,321.00 $ 38,580.00 c$ . $ -$ - ~------------ ----~- poge l ofl Attachment 1 Council Action Form -Supplemental Budget Appropriation for ACFB July 28 ,2014 Page2 FINANCIAL IMPACT: Sponsorship levels for the event range from $500 to $2,500. Consensus was reached at the July 21 , 2014 study session to sponsor the event at the $2 ,500 level using funds from the General Fund undesignated reserves. RECOMMENDATIONS: None RECOMMENDED MOTION: "I move to approve Resolution No. 44-2014 -a resolution amending the fiscal year 2014 General Fund budget to reflect the approval of a supplemental budget appropriation in the amount of $2 ,500 for the purpose of sponsoring the 2014 Arvada Community Food Bank 's Top Hats & Ball Caps fundraising event. " Or, "I move to postpone indefinitely Resolution No . 44-2014 -a resolution amending the fiscal year 2014 General Fund budget to reflect the appro v al of a $2 ,500 supplemental budget appropriation in the amount of$2,500 for the purpose of sponsoring the 2014 Arvada Community Food Bank's Top Hat s & Ball Capsfundrais ing event ." for the following reason(s) " REPORT PREPARED BY: Patrick Goff, City Manager ATTACHMENTS: 1. Resolution No. 44-2014 2. Request from Arvada Community Food Bank TITLE: CITY OF WHEAT RIDGE, COLORADO RESOLUTION NO. 44 Series of 2014 A RESOLUTION AMENDING THE FISCAL YEAR 2014 GENERAL FUND BUDGET TO REFLECT THE APPROVAL OF A SUPPLEMENTAL BUDGET APPROPRIATION IN THE AMOUNT OF $2,500 FOR THE PURPOSE OF SPONSORING THE 2014 ARVADA COMMUNITY FOOD BANK'S TOP HATS & BALL CAPS FUNDRAISER WHEREAS, the Arvada Community Food Bank has provided hunger relief to residents of the City of Wheat Ridge for 32 years; and WHEREAS, the boundaries of the organization were recently expanded to include the entire City of Wheat Ridge; and WHEREAS the Arvada Community Food Bank supports the Feed the Future program at three Wheat Ridge elementary schools; and WHEREAS the purpose of the fund raiser is to raise money for an organization that provides valuable and necessary services to the community; and WHEREAS, the Arvada Community Food bank relies on sponsors to meet its annual fundraising goals and expand their services; and WHEREAS, the funds raised will be used to sustain and expand programs to serve Wheat Ridge and the surrounding communities. NOW, THEREFORE, BE IT RESOLVED by the City Council of Wheat Ridge, Colorado, as follows: A. The City Council authorizes a supplemental budget appropriation in the amount of $2,500 from the General Fund undesignated reserves to account number 01- 102-700-780 and amending the 2014 fiscal year budget accordingly for the purposes of sponsoring the 2014 Top Hats & Ball Caps fundraising event. DONE AND RESOLVED this 28 1h day of July, 2014. Joyce Jay, Mayor ATTEST: Janelle Shaver, City Clerk Attachment 1 Joyce Manwaring Wheat Ridge Park & Recreation 4005 Kipling St Wheat Ridge ,CO 80033 Dear Joyce Manwaring , When was the last time you had the opportunity to turn $1 .00 into $2 .50? The Arvada Community Food Bank wants to give you a chance to do just that ! For thirty -two years , the Arvada Community Food Bank (ACFB) has provided effective hunger relief services . Recently , the ACFB expanded its service area to include clients in northern Jefferson County (Arvada , Edgewater , Lakeside , Golden , Mountain View , Westminster and Wheat Ridge). The ACFB also has a new program , Bridges to Opportunity, to assist our clients in reaching self-sufficiency. To acknowledge the extraordinarily successful work of the ACFB , we are celebrating at the inaugural fundraising event , Top Hats & Ball Caps : Changing the Future of Hunger, on October 11 , 2014 . More than 400 guests, including leaders from your community , will enjoy this fun , quirky , entertaining and educational event in a dynamic venue (dancing , great food , fun activities and a state-of-the-art silent auction). Our goal for this event is to raise over $50,000 for the ACFB and its expanded programs . We need your support. Join other community businesses as an event sponsor at one of four levels from $500 to $2,500. Your high value sponsorship benefits include : • a turnkey branding opportunity that extends your marketing reach ; • awareness for your brand among a key demographic in your community; • a business tax write-off for your company; • association with a regional leader in hunger relief and self-sufficiency programs ; and , • an opportunity to show support for a community institution . Our business partners are crucial to the success of this event. Please join us as a sponsor. We will be reaching out to you in early June to explore your sponsorship . For more information about this opportunity , please either call or email Judith Denham (303-420-2179 ; jbdenham@centurylink .net) Thank you for considering this opportunity . Sincerely, Sandy Martin, Executive Director Arvada Community Food Bank www.arvadacfb.org Attachment 2