HomeMy WebLinkAboutagenda.council.worksession.20221212AGENDA
CITY COUNCIL WORK SESSION
December 12, 2022
4:00 PM, City Council Chambers
427 Rio Grande Place, Aspen
I.Work Session
I.A Fleet Electrification Update
I.B Employer Sponsored Housing Program
I.C Affordable Housing and the Land Use Code
I.D Rent Relief Subsidy Waiver Program for Yellow Brick Childcare Tenants
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Fleet Zero Emisisions Roadmap_Memo_Council Work Session_12_22.docx
Exhibit A_Fleet Zero Emissions Roadmap 12_22.docx
City Employer Housing Memo FINAL.pdf
Appendix A - City of Aspen Total Compensation Philosophy Document.pdf
Appendix B COA Housing Survey Summary_.pdf
Appendix C 2022 Housing Guidelines Final.pdf
Staff Memo_ AH Credits Worksession_12_12_22.pdf
Exhibit A_ DW_AH Credits Memorandum.pdf
Exhibit B_Aspen City Council Credits Letter - HHP (2022-12-05).pdf
12.12.2022 YB Rent Waiver Memo.docx
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MEMORANDUM
TO: Mayor Torre and City Council
FROM: Tessa Schreiner, Sustainability Manager
Tim Karfs, Sustainability Programs Administrator
THRU: CJ Oliver, Environmental Health and Sustainability Director
Phillip Supino, Community Development Director
MEMO DATE: November 23, 2022
MEETING DATE: December 12, 2022
RE: Fleet Zero Emissions Roadmap
REQUEST OF COUNCIL:
Staff requests City Council’s approval of the direction and implementation of the Fleet
Zero Emissions Roadmap (FZER). The FZER draws from the combined experience of
department heads and staff to prepare the municipal fleet for the transition to electric and
zero emission vehicles and equipment. This plan recommends immediate and ongoing
actions to support department decisions to purchase electric and zero emission options
on a timeline specified by Aspen’s greenhouse gas emissions (GHG) reduction goals
while also ensuring that city operational needs are met.
BACKGROUND:
Summary: The city will not reach its carbon reduction goals unless it replaces existing
fossil-fuel powered vehicles with electric and zero-emission vehicles and equipment. This
memo and the recommended actions herein support the city’s science-based targets
(SBTs) to reduce emissions by 63% by 2030 and 100% by 2050set earlier this year. The
FZER also advances Council’s carbon goal, which directs staff to reduce Aspen’s GHG
emissions by taking meaningful action and providing leadership, and specifically directs
action in the transportation sector. Transportation is the leading source of emissions
contributing to anthropogenic climate change - nationally and in Colorado. In Aspen, on-
road transportation is responsible for 11% of community emissions, the third largest
source of emissions. According to the 2020 Municipal GHG Inventory, which is an annual
inventory of municipal operations, city fleet fuel use was the second largest source (23%)
of emissions in 2019, and the largest source (24%) in 2020.
In May 2022, Council approved the development of a fleet electrification plan to reduce
emissions and support the acceleration of electric and zero emissions vehicles and
equipment adoption. The FZER starts a process to identify and overcome the numerous
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challenges that electrification poses and in doing so gives direction on how the city can
reach its climate goals. The city should continue to prioritize right-sizing and fleet
efficiencies as a first step to reduce emissions and only when a replacement is necessary
an electric or zero emission option should be considered.
Fleet Inventory: Aspen has been an early adopter of electric vehicle (EV) technology,
starting with two Nissan Leafs in 2016, and more recently with the Aspen Police
Department’s purchase of five Tesla Model Ys. The Tesla Model Ys are the city’s largest
single investment in EV technology to date – the merger of these vehicles into the Aspen
Police Department fleet is a good test case to understand the systems that need to be in
place for future EVs, including updates to policies and charging infrastructure.
As of August 2022, the City of Aspen municipal fleet consists of 229 fleet assets across
19 departments, with 11 Battery-Electric Vehicles, 3 Plug-in Electric Hybrids Vehicles
(PHEVs), and 9 Hybrid Vehicles in use at the city. Looking at the total number of vehicles
and equipment relative to the size of the city fleet, there are multiple opportunities to build
on recent successes of incorporating EVs into the fleet if the appropriate conditions for
the replacement vehicle are met.
Fleet Zero Emissions Roadmap: The Environmental Health and Sustainability (EHS)
Department facilitated four internal stakeholder meetings in the summer of 2022. The
stakeholder meetings asked 25 staff across 13 city departments to weigh in on the
barriers and opportunities to increased electric and zero emission vehicle and equipment
adoption at the city. The FZER combines recommendations from the stakeholder
meetings with external partner resources and research on best practices across the US
and abroad. The outcome is a planning document that outlines how the city can prepare
for the incoming wave of electric and zero emission vehicle technologies that are currently
available or are anticipated to reach production soon. Given the contributions of city fleet
fuel emissions on organizational and community emissions totals, the FZER is an
important tool to meet Council’s GHG reduction goal and community SBTs.
DISCUSSION:
Stakeholder recommendations: The FZER begins a process of strategic restructuring to
add electric and zero emissions vehicles and equipment. It includes a standardized
procurement form called an EV decision-making matrix to assess suitable EV
replacements, an analysis of chargers/buildings/needs, and identification of training
needs. The recommendations are meant to be evaluated regularly and updated as new
developments and opportunities arise. The FZER does not call for vehicles and
equipment to be replaced before their end of use period. This would be counter-
productive to the city’s climate goals due to carbon embedded in the manufacturing
process itself. The FZER acknowledges that city operations take priority, and that the
transition to electric and zero emission vehicles and equipment needs to happen with little
to no disruptions to service. Instead of requiring that a certain percentage of vehicles be
electrified by a certain year, the FZER identifies what the city can do in the next several
years to plan for and implement increased electric and zero emission vehicles usage.
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The recommendations contained in the FZER are organized into six topic areas. Each
topic area features key section takeaways and a list of associated action items, as
recommended by the stakeholder group, to be accomplished by lead departments over
the next several years:
• Fleet and equipment inventory: analyze current inventory and market trends.
• Fleet replacement process: find opportunities to integrate electric and zero
emissions vehicle and equipment while recognizing that each internal
combustion engine vehicle purchased is an approximately 7-years/80,000 miles
delay on achieving the city’s climate goals.
• Budget considerations: balance the high upfront costs associated with the
transition.
• EV charging infrastructure: understand the policies and infrastructure needed to
support an all-electric fleet.
• Fleet maintenance: staff need to stay up to date on workforce development
opportunities.
• Internal and external education: ensuring that staff and the community know how
to safely and efficiently use electric and zero emission vehicles and equipment.
The FZER is part of an ongoing process to prepare for and explore opportunities to
increase electric and zero emissions vehicle adoption in the municipal fleet. The success
of the project relies on deliberate and strong collaboration between city departments. The
EHS Department will drive the implementation of action items as an internal service
provider and will be responsible for continuously checking in on the process and ensuring
that best practices are observed.
For Council Discussion: Staff seeks Council direction on the following:
1. Does Council support the direction of the Fleet Zero Emissions Roadmap (FZER)
to enable its implementation by staff?
Conclusion
As manufacturers play catch-up on the demand for new vehicles and equipment, the city
has an opportunity to consider its current capacity and the systems required to handle
future EVs. The FZER designates a process for the city to prioritize new electric and zero
emission vehicles while simultaneously reducing emissions in support of the city’s
science-based targets. The process assists staff’s decision to replace Internal
Combustion Engine (ICE) vehicles and introduce charging infrastructure on a timeline
specified by Aspen’s bold climate goals, as well as acting as a proof of concept for the
community.
ENVIRONMENTAL IMPACTS:
By supporting the transition to zero emission and electric vehicles in the City fleet, Aspen
will be well positioned to meet its community carbon emission reduction goals.
Furthermore, replacing City-owned ICE vehicles with EVs will improve air quality in the
Aspen area by removing up to 614 metric tons of CO2 worth of local emissions. EV
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adoption reduces pollution emanating from tailpipes, including ozone and particulate
matter pollution. The FZER hopes to share insights with the community and empower
private businesses such as hotels, grocery stores, banks, and other private businesses
to replace ICE vehicles and introduce charging infrastructure on a timeline specified by
Aspen’s bold climate goals.
FINANCIAL IMPACTS:
There are no costs to the City of Aspen to approve the FZER beyond the allocation of
staff time. The FZER provides recommendations for future work areas that include a
comprehensive fleet and facilities analysis to understand the city’s current capacity and
what infrastructure upgrades are necessary to support future EVs. The high upfront costs
associated with the transition to electric and zero emission vehicles and equipment will
be the subject of ongoing discussions, and potential funding requests will be brought to
Council for consideration. As the City pursues electric and zero-emission vehicles there
may be opportunities to offset costs with grant funding offered by state and federal
sources.
STAFF RECOMMENDATION:
Staff recommends that Council approve the FZER to help guide staff and policy decision-
making in support of the goal to transition 100% of the municipal fleet to electric and zero
emission vehicles and equipment by 2050.
ALTERNATIVES:
Council could decide not to approve the implementation of the FZER, and staff could
instead continue to identify and replace ICE vehicles with EVs at the current pace.
CITY MANAGER COMMENTS:
______________________________________________________________________
______________________________________________________________________
ATTACHMENTS
Exhibit A: COA Fleet Zero Emissions Roadmap 12_22
1
EXHIBIT A:
Fleet Zero
Emissions
Roadmap (FZER)
2
Contents
FZER Introduction ...................................................................................................... 3
Background: ............................................................................................................... 3
FZER Process: ........................................................................................................ 4
Initial Stakeholder Survey: ..................................................................................... 4
City of Aspen Fleet Inventory: August 2022:........................................................ 4
Guiding Principles: .................................................................................................... 5
FZER Stakeholder Recommendations: .................................................................... 6
Fleet and Equipment Inventory……………………………………………………..…….6
Fleet Replacement Process ...................................................................................... 7
Budget Considerations .............................................................................................. 9
Charging Infrastructure Needs ............................................................................... 10
EV Fleet Maintenance .............................................................................................. 11
Internal and External Education ............................................................................. 12
Conclusion: .............................................................................................................. 13
Appendix ................................................................................................................... 14
ATTACHMENT A: Stakeholder participant list. .................................................. 14
ATTACHMENT B: Full stakeholder recommendation list .................................. 15
ATTACHMENT C: Total number of vehicles and equipment per department. . 18
ATTACHMENT D: EV Decision-Making Matrix.. ................................................. 18
ATTACHMENT E: Fleet parking locations and distance to transformers. ....... 21
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FZER Introduction
The Fleet Zero Emissions Roadmap (FZER), developed by a multi-department
stakeholder group, charts a path for the City of Aspen to transition its municipal fleet away
from fossil fuels and towards 100% electric and zero emissions vehicles and equipment
by 2050. As part of the city’s goal to reduce emissions in the transportation sector, the
FZER lists the actions necessary to support increased fleet vehicle and equipment
electrification. By focusing on fleet vehicles and equipment, the FZER expands upon
previous electric vehicle (EV) adoption strategies outlined in the Aspen Community
Electric Vehicle Readiness Plan, and the City of Aspen Electric Vehicle Public Charging
Masterplan.
As a result of increasingly strong carbon reduction commitments made by the state and
federal government, including the recent passage of the Inflation Reduction Act of 2022,
and from original equipment manufacturers (OEM) themselves - internal combustion
engine (ICE) vehicles are on the way out. The FZER begins a process of important and
planned restructuring so that the city is prepared for future zero emission mandates,
funding opportunities, and technologies. This plan should be used as a working guide to
equip staff with an understanding of the steps needed to incorporate electric and zero
emissions vehicles and equipment into the municipal fleet. By strategically addressing
barriers, the city can take full advantage of the investment in the transformation of its fleet
with limited disruptions to services. The transition to an all-electric and zero emission fleet
is going to take years to complete. The FZER is intended to be frequently checked-in on,
and staff can add to and update it regularly. If any changes are put forward that require a
strong policy shift, the decision will be brought to Council for consideration.
Background:
EVs are an easily observed and recognized metric of the city’s efforts to reduce its
emissions footprint. According to the 2020 City of Aspen Municipal GHG Inventory, fleet
fuel use was the second largest source (23%) of emissions in 2019, and the largest
source (24%) in 2020 for municipal operations. As these emissions are directly within the
city’s span of control, efforts to decarbonize the municipal fleet represents one of the most
direct opportunities for GHG reductions among city owned assets. By setting a strong
example for the community to follow, the FZER helps move the city closer towards
achieving its science-based targets intended to keep global temperatures below 1.5°C.
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FZER Process:
The FZER brings together stakeholder recommendations from 25 department heads and
staff across 13 city departments (see page 14 of the Appendix for a list of stakeholder
participants). Four stakeholder meetings were held in the summer of 2023 which involved
in-depth discussions around the challenges, opportunities, scope, and goals for fleet
electrification and charging. By design, the stakeholder meetings were the beginning of
an ongoing and collaborative process that leaves the door open for updates as new
developments and opportunities arise.
Initial Stakeholder Survey:
Based on a survey sent to the stakeholder group intended to gain an understanding of
how individual department’s see electric and zero emission vehicles and equipment in
the fleet, there is strong agreement that the city needs to electrify to achieve its climate
goals. The survey results acknowledged current EV trends in that most respondents
expect to electrify existing models of their cars, light duty trucks, and shuttles in the next
five years. However, with less use cases to draw from, respondents indicated less
enthusiasm to adopt medium/heavy class vehicles within that timeframe. The survey
also asked participants about their pain points to greater electrification, the top five
answers being:
1. Uncertainty about replacement parts/vehicle maintenance
2. Insufficient budget to cover upfront costs
3. Limited vehicle options to meet required function/vehicle types untested
4. Too many unknowns.
5. Cost/complexity of electrical system upgrades
5. Vehicle duty cycle not suitable for electrification
This FZER addresses these barriers, suggests ways the city should continue to
evaluate them, and provides recommendations to work through them.
City of Aspen Fleet Inventory: August 2022:
As of August 2022, the City of Aspen municipal fleet consists of 229 fleet assets across
19 departments, with 11 Battery-Electric Vehicles, 3 Plug-in Electric Hybrids Vehicles
(PHEVs), and 9 Hybrid Vehicles in use at the city. The total number of vehicles and
equipment by department is listed in the Appendix on page 19. Looking at the total
number of vehicles and equipment relative to the size of the city fleet, there are multiple
opportunities to build on recent successes of incorporating EVs into the fleet if the
appropriate conditions for the replacement vehicle are met:
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Vehicles – 116 total Vehicles/Equipment – 51 total
Included in the municipal fleet are units of mobile/stationary equipment as seen below.
Equipment - 62 total
.
Guiding Principles:
These are the values driving the implementation of the plan:
- The FZER starts a process for incorporating additional EVs and zero emission
equipment into the municipal fleet. As new technologies and information become
available, the process can and will be updated.
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- The FZER draws from the combined skills, knowledge, and experience of 25
department heads and staff. The recommendations contained in the FZER can
only be achieved through ongoing collaboration across city departments and with
external partners.
- The FZER understands that the operational needs of the city come first. By
strategically addressing how to include EVs and zero emission equipment, each
department is afforded a great deal of flexibility in how they individually pursue
electrification. The FZER will be regularly checked-in on by staff to ensure that it
stays up to date.
FZER Stakeholder Recommendations:
The recommendations contained in the FZER are organized into six topic areas:
1. Fleet and Equipment Inventory
2. Fleet Replacement Process
3. Budget Considerations
4. EV Charging Infrastructure
5. EV Fleet Maintenance
6. Internal and External Education
Each topic area features key section takeaways and a list of associated action items, as
recommended by the stakeholder group, to be accomplished by lead departments over
the next several years.
Fleet and Equipment Inventory
Key Takeaways:
Supply chain issues: All vehicles, including EVs, are in increased demand due to supply
chain disruptions from the COVID-19 pandemic, and strong competition for fewer vehicles
has resulted in higher prices and long wait times. As new vehicle and equipment models
enter the market, the city should know how these options fit into existing needs and be
prepared to act quickly to secure their benefits.
Updated fleet and equipment inventory: As departments reflect on long-term
operational needs, further analysis on the city’s fleet and equipment inventory, including
details on small gas-powered tools is a vital step in preparing for the transition.
Aspen’s unique needs: To account for factors specific to Aspen, including its rural
geography and climate, the FZER recommends that staff act as a clearing house to
assess the suitability of all incoming EV and zero emission opportunities.
Fleet and Equipment Inventory Lead Depts. Timeline
- Align work deliverables with finance procurement
windows.
All depts. 2023/
Annually
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- Send a list of suitable EV and electric equipment
replacements and identify near and long-term
deployment opportunities to departments.
EHS 2023/
Annually in
March
- Assess and improve format and accessibility of
fleet inventory data.
EHS
Finance
Streets
2023
- Develop a plan to inventory all equipment assets
including small gas-powered tools (e.g.
chainsaws, snow blowers).
EHS
2023-2024
Fleet Replacement Process
Key Takeaways:
Fleet replacement schedule policy: The fleet replacement schedule is administered by
the Streets department and calls for departments to consider updating their fleet vehicles
on a 7-year or 80,000 miles timeline. This means that every internal combustion engine
(ICE) vehicle purchased instead of an electric or zero emission model could represent a
7-year delay on the city securing its emissions reduction targets. The FZER does not
direct departments to replace ICE vehicles and equipment ahead of the fleet replacement
schedule – its purpose is to streamline processes needed for departments to opt for an
electric or zero emission vehicle or equipment at the time of replacement.
EV decision-making matrix: In order to align the operational needs of the city with the
need to electrify fleet vehicles faster, the FZER introduces an EV Decision-Making Matrix
(outlined in the Appendix on page 19) that helps departments determine whether an
electric or zero emissions vehicle replacement is appropriate. The EV Decision-Making
Matrix is meant to standardize the decision-making process and ensure that the
replacement is a right fit to avoid stranded assets. The criteria include a total cost of
ownership analysis for each vehicle, life-cycle greenhouse gas emissions, embodied
carbon, proximity to local/regional dealerships for support, ability to achieve the city’s
climate goals and a proven track record of the vehicles ability to perform.
Plug-in electric hybrid vehicles (PHEVs): EVs and zero emission equipment should be
introduced to the municipal fleet incrementally to maintain strong service standards. The
FZER stakeholder group recommends that PHEVs and to a lesser-extent, low emission
Hybrids vehicles continue to be used in the near term as city operations transition to
accommodate a larger percentage of zero emissions vehicles.
Carpool vehicles: Carpool vehicles (including shuttles), some of which travel over 100+
miles to Silt each day, are a special use case at the city. The long-distance travel patterns
of these vehicles are much different to the in-town driving that most other city owned
vehicles are required to do. As a result, the requirements for an electric or zero emissions
carpool vehicle replacement will need to be tailored to meet specific needs.
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Medium/heavy duty vehicles: The FZER stakeholder group recommends that
medium/heavy duty EVs and zero emissions equipment be the subject of a controlled
pilot before being considered a viable replacement for the fleet.
Electric equipment: The city should continue to explore opportunities to mitigate air
pollution and noise from construction through electric equipment alternatives.
Fleet and Equipment Replacement Process Lead Depts. Timeline
- Introduce battery electric, hybrid, plug-in electric
hybrid, and hydrogen fuel cell vehicles to the fleet
incrementally and after applying lessons learned
from EV pilots.
- Replace existing vehicles and equipment with EVs
only when the asset has reached its end of duty life
cycle.
All depts. 2023/
Annually,
in March
- Incorporate additional flexibility in the 7/years
and/or 80,000 miles vehicle replacement schedule
to support the transition or retirement of select
vehicles.
EHS
Finance
Streets
2023-2025
- Adopt an EV decision-making matrix to evaluate,
document, and share fleet decisions on how each
new vehicle purchase is made. The matrix is to be
used in conjunction with the vehicle replacement
schedule. See the EV Decision-Making Matrix
listed in the Appendix for an example of the criteria
to be used.
EHS
Streets
Annually,
in March
- Each department to publish planned replacements
annually. Review and update the EV decision-
making matrix as needed.
EHS
Streets
Annually,
in March
- Pursue EV pilot opportunities for light trucks,
carpool vehicles, medium/heavy-duty vehicles, and
off-road equipment.
- Incorporate progressively heavier class vehicles
into the fleet on a timeline specified by climate
goals.
All depts.
Annually
- Continue to install and monitor telematics on new
EV purchases on an opt-in basis.
- Formalize processes for departments to share EV
transition insights and best practices.
EHS Annually
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Budget Considerations
Key Takeaways:
High upfront costs: The high upfront costs associated with EVs and the infrastructure
needed to charge them is one of the key barriers to electrification. The combined total of
these costs are still much higher than their ICE vehicle counterparts. The FZER
recommends additional research into different purchasing strategies, including leasing,
to offset the high costs of EVs and equipment.
Total cost of ownership (TCO): Despite high upfront costs, the total cost of ownership
(TCO) of EVs which includes insurance, maintenance, repairs, and cost of charging are
expected to save departments money over the lifetime of the vehicle. 1
Internal budgeting processes: Internal accounting/budgeting practices currently
prevent the TCO of electric and zero emission vehicles from being properly understood.
This is especially true where vehicles are purchased through one departments capital
budget, meanwhile the charging, and maintenance costs, are paid through multiple
departments operating budgets. The opportunity for EVs, is that the return on the
investment is realized through savings in the operations budget. The FZER acknowledges
the TCO of charging equipment, and the final resale value of the EV still need to be
assessed. The FZER calls for stakeholders to begin working to address the budget
measures needed to support the operational paradigm shift from ICE vehicles to electric
and zero emissions vehicles.
Budget Considerations Lead Depts. Timeline
- Review state and federal EV and charging station
funding opportunities to offset costs.
EHS
2023/
Annually
- Establish an EV fleet finance team to address the
high upfront costs of new EV and charging station
purchases and account/budget for the transition
from gas/diesel expenses to a utility bill expense.
EHS
Finance
Streets
2023-2024
- Continue to review and refine total cost of
ownership and emissions estimates for EVs with
respect to updates to electric rates and policies.
EHS
Finance
Utilities
Annually
- Explore the use of incentives for internal fleet
purchasing. Encourage fleet efficiency, and right
sizing decisions at the end of each vehicle duty
lifecycle.
EHS
Finance
2023-2025
1 “Electric Vehicle Benefits and Considerations.” Alternative Fuels Data Center: Electric Vehicle Benefits
and Considerations, https://afdc.energy.gov/fuels/electricity_benefits.html.
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Charging Infrastructure Needs
Key Takeaways:
Charging infrastructure: EV charging infrastructure was consistently pointed to as the
topic that needed the most staff attention and resources throughout the FZER stakeholder
process. As of November 2022, most electric vehicles within the municipal fleet still utilize
chargers that can also be accessed by the public. The city is already applying the lessons
learned from the implementation of the City of Aspen Electric Vehicle Public Charging
Masterplan but fleet charging infrastructure will need to be distinct from what is made
available to the public. This recognizes that the existing amount of charging infrastructure
does not adequately serve the needs of current and future fleet vehicles, and effectively
caps the number of new EV purchases the city can make.
Fleet and facilities analysis: The FZER stakeholder group recommends that the city
perform a comprehensive fleet and facilities infrastructure analysis to determine the
following:
- Fleet charging needs to reach the goal of 100% electric and zero emissions
vehicles and equipment by 2050.
- Costs associated with purchasing and selecting the appropriate charging
equipment to meet individual departments’ operating needs.
- The city will need to continue to assess the impacts of new energy demands and
how to best manage additional load on the grid, which according to a recent study
could produce an additional 41% increase in energy use statewide by 2050.
Norms and policies around charging: As the city expands its fleet charging
infrastructure, there is a need to develop specific policies and standard operating
procedures that outline department responsibilities, maintenance schedules, and
responsibilities, and expectations around charging.
GIS Fleet Parking Locations: The location, dwell time, and times of charging are critical
to understanding charging needs. The FZER stakeholder group with help from the city’s
GIS department created a Fleet Parking Distances to Transformers map (see the
Appendix on page 21) which offers a first glance into the availability of charging at current
parking locations. The map is only intended to show the proximate location of nearby
electrical resources with respect to where fleet vehicles are currently parked. A full fleet
and facilities infrastructure analysis is needed to determine availability and suitability of
these transformers.
Charging Infrastructure Needs Lead Depts. Timeline
- Create policies and standard operating procedures
for the charging infrastructure use, maintenance,
and funding contributions.
EHS
Finance
Streets
2024/
Annually
11
- Perform a comprehensive fleet and facilities
infrastructure analysis to understand fleet
operational and future EV charging needs, building
and transformer capacity, evaluate costs and
decide on appropriate charging equipment, and to
assess new charging demands and anticipate grid
impacts.
Assets
EHS
Finance
Streets
Utilities
2023/
Annually
- Explore on-site solar or managed charging and
storage to reduce impacts on the electric grid.
EHS
Utilities
2023-2025
- Develop a fleet EV charger maintenance schedule
to report problems, and ensure funds for ongoing
maintenance, support and connectivity, and
warranty costs.
EHS
Finance
Streets
2023-2024
- Develop policies that prioritize city fleet vehicle
charging over public charging including specific
rates and time of use charges.
EHS
2023
- Consider opportunities to equip approved staff with
the ability to charge city vehicles at home.
EHS
Human
Resources
Streets
2023
- Evaluate public private partnership opportunities
for internal EV charging management on a
revolving basis.
EHS
Finance
Annually
EV Fleet Maintenance
Key Takeaways:
EVs are still a relatively new technology: It is still difficult to estimate the ongoing
maintenance costs or what is needed in terms of repairs as many EVs have not yet
reached their end of use period. The FZER stakeholder group named uncertainty about
replacement parts/vehicle maintenance as the top barrier to electric vehicle
implementation. This has been true where inadequate local supply chains and parts on
backorder have meant that several city owned fleet vehicles have experienced substantial
vehicle dowtime. It is becoming more commonplance to see OEMs and dealerships offer
an 8-10 year/100k mile warranty on EV batteries, thus most maintenance and repairs
have occurred outside of the city’s Streets department. The city should start a process to
keep track of ongoing maintenance issues.
Workforce development and training: New electric and zero emission vehicles require
staff that know how to operate them. It is essential that the city supports internal workforce
development to ensure departments and staff are up to date on opportunities and
prepared to take on maintenance requirements as required.
12
EV Fleet Maintenance Lead Depts. Timeline
- Continue to review EV training and skill building
opportunities for fleet technicians and enroll staff
on an as needed basis.
EHS
Streets
Annually
- As vehicle and equipment warranty should cover
most maintenance needs, there is additional need
for clarity behind what fleet technicians should work
on.
- Assess capacity and needs for additional full-time
technicians.
Streets Annually
- Develop partnerships to ensure the city is up to
date on best practices for EV fleet maintenance.
- Where possible, utilize local/regional vendors to
perform warranty services.
EHS
Streets
Annually
Internal and External Education
Key Takeaways:
Driver education: All drivers should be aware of the systems in place, the value of
distributed resources in batteries, and how to charge EVs. The stakeholder group
supports the development of an internal communications plan to demonstrate best
practices for operating EVs. This plan would provide the basis for the city to start more
extensive community outreach to share lessons learned from the FZER process.
Community outreach: An essential step to support the fleet transition is by improving
messaging and education on how to acquire and operate EVs. As the city deploys more
electric and zero emissions vehicles and equipment, best practices should be shared with
the broader community.
Safety and emergency response protocols: As EVs become more commonplace,
emergency response management protocols that have been designed around
conventional vehicles will need to be updated.
Internal and External Education Lead Depts. Timeline
- Develop an internal EV communications plan and
commit to outreach to ensure that drivers are
aware of the differences between EVs and their
gasoline/diesel counterparts.
Comms
EHS
Streets
2023-2024
- Include additional EV driver education training
requirements as part of the human resources driver
assessment onboarding. Provide specialized
training for medium/heavy class vehicles.
EHS
Human
Resources
2023
13
Conclusion:
Moving away from fossil fuels and towards electric and zero-emission vehicles and
equipment will reduce the city’s total emissions footprint, help demonstrate Aspen’s
climate values, and set a strong precedent for electrification to the rest of the community.
The FZER outlines the steps and actions necessary for the city to add electric and zero
emissions vehicles on a timeline to meet Aspen’s climate goals without compromising
operational demands. The implementation of this plan will be led by the Environmental
Health and Sustainability Department in collaboration with several key departments
including Streets, Finance, Parks, and Capital Assets over the next several years. This
internal planning document is meant to guide staff actions and will be regularly checked-
in on and updated as new developments and technologies come to light.
- Provide opportunities for staff to test drive EVs and
electric equipment by hosting ride and drive events.
EHS
Streets
Annually
- Explore opportunities to subsidize electric vehicle
purchases for city staff.
EHS Annually
- Create a process to address EV safety questions
and emergency response management.
- Develop internal protocols for battery management
and what to do if an EV battery is low and the driver
is not near a charging station.
EHS
Parking
Streets
2023/
Annually
- Make EV information, resources, and experiences
more widely available. Promote wins and share
lessons learned with the broader community.
Comms
EHS
Annually
- Perform selective outreach and act as a resource
for private business and organizations interested in
electric and zero emission fleet vehicles.
EHS
2023/
Annually
14
Appendix
ATTACHMENT A: Stakeholder participant list.
Name Position Department
Steve Barr Parks Operations Manager Parks
Shannon Buckner Executive Assistant Office of the City Manager
Tyler Christoff Director Streets
Linda Consuegra Assistant Chief Aspen Police Department
Gabriel Finesilver Transportation Coordinator Transportation/Mobility
Blake Fitch Parking Operations
Manager
Parking
Justin Forman Field Operations Manager Utilities
Matthew Gillen Executive Director Housing
Mike Horvath Senior Project Manager Engineering
Tim Karfs Sustainability Programs
Administrator
Climate Action Office,
Environmental Health and
Sustainability
Andrew Kramer Budget Manager Finance
Matt Kuhn Director Parks
Daniel Maldonado Assistant Street
Superintendent
Streets
Jerry Nye Superintendent
Streets/Fleet Manager
Streets
CJ Oliver Director Environmental Health and
Sustainability
Pete Rice Deputy City Engineer Parking, Transportation,
Engineering
Lynn Rumbaugh Transportation Program
Manager
Transportation
Sarah Sachs HR Business Partner
Representative
Human Resources
Robert Schober Director Capital Assets
Tessa Schreiner Sustainability Manager Climate Action Office,
Environmental Health and
Sustainability
John Sobieralski Network Coordinator Information Technology
Pete Strecker Finance Director Finance
Phillip Supino Director Community Development
Michael Tunte Landscape Architect and
Construction Manager
Parks and Open Space
Ladd Vagen Interim Director of
Information Technology
Information Technology
John Woltjer Police Officer IV Aspen Police Department
Joshua Zeeb GIS Analyst GIS, Engineering
15
ATTACHMENT B: Full stakeholder recommendation list: Lead departments are
responsible for coordinating department stakeholders and managing deliverables.
Stakeholder Recommendations Lead
Depts.
Timeline
Fleet and equipment inventory
- Align work deliverables with finance procurement
windows.
EHS
Finance
Streets
2023/
Annually
- Send a list of suitable EV and electric equipment
replacements and identify near and long-term
deployment opportunities to departments.
EHS 2023/
Annually in
March
- Assess and improve format and accessibility of fleet
inventory data.
EHS
Finance
Streets
2023
- Develop a plan to inventory all equipment assets
including small gas-powered tools (e.g. chainsaws,
and snow blowers).
EHS
2023-2024
Fleet and equipment replacement process
- Introduce battery electric, hybrid, plug-in electric
hybrid, and hydrogen fuel cell vehicles to the fleet
incrementally and after applying lessons learned
from EV pilots.
- Replace existing vehicles and equipment with EVs
only when the asset has reached its end of duty life
cycle.
All depts. 2023/
Annually,
in March
- Incorporate additional flexibility in the 7/years and/or
80,000 miles vehicle replacement schedule to
support the transition or retirement of select
vehicles.
EHS
Finance
Streets
2023-2025
- Adopt an EV decision-making matrix to evaluate,
document, and share fleet decisions on how each
new vehicle purchase is made. The matrix is to be
used in conjunction with the vehicle replacement
schedule. See the EV Decision-Making Matrix listed
in the appendix for an example of the criteria to be
used.
EHS
Streets
Annually,
in March
- Each department to publish planned replacements
annually. Review and update the EV decision-
making matrix as needed.
EHS
Streets
Annually,
in March
- Pursue EV pilot opportunities for light trucks,
carpool vehicles, medium/heavy-duty vehicles, and
off-road equipment.
- Incorporate progressively heavier class vehicles
into the fleet on a timeline specified by climate
goals.
All depts.
Annually
16
- Continue to install and monitor telematics on new
EV purchases on an opt-in basis.
- Formalize processes for departments to share EV
transition insights and best practices.
EHS Annually
Budget considerations
- Review state and federal EV and charging station
funding opportunities to offset costs.
EHS
2023/
Annually
- Establish an EV fleet finance team to address the
high upfront costs of new EV and charging station
purchases and account/budget for the transition
from gas/diesel expenses to a utility bill expense.
EHS
Finance
Streets
2023-2024
- Continue to review and refine total cost of ownership
and emissions estimates for EVs with respect to
updates to electric rates and policies.
EHS
Finance
Utilities
Annually
- Explore the use of incentives for internal fleet
purchasing. Encourage fleet efficiency, and right
sizing decisions at the end of each vehicle duty
lifecycle.
EHS
Finance
2023-2025
Charging infrastructure needs
- Create policies and standard operating procedures
for charging infrastructure use, maintenance, and
funding contributions.
EHS
Finance
Streets
2024,
Annually
- Perform a comprehensive fleet and facilities
infrastructure analysis to understand fleet
operational and future EV charging needs, building
and transformer capacity, evaluate costs and
decide on appropriate charging equipment, and to
assess new charging demands and anticipate grid
impacts.
Assets
EHS
Finance
Streets
Utilities
2023/
Annually
- Explore on-site solar or managed charging and
storage to reduce impacts on the electric grid.
EHS
Utilities
2023-2025
- Develop a fleet EV charger maintenance schedule
to report problems, and ensure funds for ongoing
maintenance, support and connectivity, and
warranty costs.
EHS
Finance
Streets
2023-2024
- Develop policies that prioritize city fleet vehicle
charging over public charging including specific
rates and time of use charges.
EHS
2023
- Consider opportunities to equip approved staff with
the ability to charge city vehicles at home.
EHS
Human
Resources
Streets
2023
- Evaluate public private partnership opportunities for
internal EV charging management on a revolving
basis.
EHS
Finance
Annually
17
EV fleet maintenance
- Continue to review EV training and skill building
opportunities for fleet technicians and enroll staff on
an as needed basis.
EHS
Streets
Annually
- As vehicle and equipment warranty should cover
most maintenance needs, there is additional need
for clarity behind what fleet technicians should work
on.
- Assess capacity and needs for additional full-time
technicians.
Streets Annually
- Develop partnerships to ensure the city is up to date
on best practices for EV fleet maintenance.
- Where possible, utilize local/regional vendors to
perform warranty services.
EHS
Streets
Annually
Internal and external education
- Develop an internal EV communications plan and
commit to outreach to ensure that drivers are aware
of the differences between EVs and their
gasoline/diesel counterparts.
Comms
EHS
Streets
2023-2024
- Include additional EV driver education training
requirements as part of the human resources driver
assessment onboarding. Provide specialized
training for medium/heavy class vehicles.
EHS
Human
Resources
2023
- Provide opportunities for staff to test drive EVs and
electric equipment by hosting ride and drive events..
EHS
Streets
Annually
- Explore opportunities to subsidize electric vehicle
purchases for city staff.
EHS Annually
- Create a process to address EV safety questions
and emergency response management.
- Develop internal protocols for battery management
and what to do if an EV battery is low and the driver
is not near a charging station.
EHS
Parking
Streets
2023/
Annually
- Make EV information, resources, and experiences
more widely available. Promote wins and share
lessons learned with the broader community.
Comms
EHS
Annually
- Perform selective outreach and act as a resource
for private business and organizations interested in
electric and zero emission fleet vehicles.
EHS
2023/
Annually
18
ATTACHMENT C: Total number of vehicles and equipment per department.
ATTACHMENT D: EV Decision-Making Matrix. Designed to assist departments and
Streets department select suitable electric and zero emission replacements.
City of Aspen Electric Vehicle Decision-Making Matrix (Example)
COA FLEET REPLACEMENT - EV DECISION-MAKING MATRIX
Requesting
Department Date
Date of Review:
Streets Initial:
STEP 1: Description of what the vehicle up for replacement is being used for (e.g. occupants, distance
driven regularly, tools or specialized use, etc.)
STEP 2: What is the average length of dwell time (the time parked at a specific location) for the vehicle?
Add a brief description of where the vehicle is expected to park and for how long.
STEP 3: Is there an available EV charging station for the vehicle to utilize? If not, is there a charger
scheduled for installation by the time of vehicle delivery?*
Proceed to STEP 4.
Consider delaying the vehicle replacement until an EV charging unit is installed at the parking location.
*Contact EHS or Streets if you have questions on charging station availability.
STEP 4: Determine if there is a suitable electric or zero emission alternative for the vehicle.
1
4
3
2
20
30
5
5
6
7
1
9
5
2
1
17
8
69
34
0 10 20 30 40 50 60 70 80
City Manager Office
Engineering
Building and Planning
Environmental Health
Police
Streets
Recreation
ARC
Asset Management
Housing
Transportation
Car 2 Go
Parking
Parking garage
IT
Water
Electric
Parks
Golf
The current model is used to haul tools and equipment to and from job sites within city limits. The vehicle is occasionally used
to drive up and down valley. The vehicle rarely has over 2 occupants.
The vehicle is anticipated to park at the Rio Grande Parking Garage overnight for approx. 12 hours.
NO
YES
EHS
11/3/2022
11/7/2022
DM
19
Apply results from research into what electric or zero emission vehicles are available to the city.
Use the DRVE tool or visit the Department of Energy Fuel Economy website www.fueleconomy.gov and select
"Compare Side- by-Side" to evaluate compatible models.
STEP 5: Send form to EHS + Streets with suggestions for the replacement vehicle.
For EHS + Streets to complete.
STEP 6: Complete vehicle replacement options analysis:
EXISTING GASOLINE NEW ELECTRIC NEW HYBRID
OVERVIEW
Year 2022 2022 2022
Manufacturer Ford Ford Ford
Model Ford F-150 Ford F-150 Ford F-150
Trim 4WD
Lightning 4WD Extended Range 4WD HEV
Engine
2.7 L, V6, Automatic (S10), Turbo Automatic (A1)
3.5 L, V6 Automatic (S10), Turbo
Vehicle Class 2 2 2
Fuel Type Regular Gasoline Electricity Regular Gasoline
SPECS
Horsepower rating (hp) 400 580 430
Tow Capacity (lbs) 14,000 10,000 12,700
Payload Capacity (lbs) 2,235 2,120
Gross Vehicle Weight Rating (lbs) 6,010 6,500 6,250
Acceleration (0-60, seconds) 4 4.5 5.8
Torque 775
Power to Weight Ratio (Divide horsepower by weight)
Clearance
Standard or Extended Range Battery N/A Extended N/A
COST
Purchase Price ($) $34,625 $39,974 $42,000
Outfitting Price ($)
Source BidsColorado BidsColorado BidsColorado
Current Vehicle Resale Value $10,000 $10,000 $10,000
State Grant Incentive Available ($)
Net Price ($) $24,625 $29,974 $32,000
Leasing option (yes/no)
Leasing Price ($)
Leasing Term (yrs)
Replacement Schedule (yrs)
MAINTENANCE COSTS
E.g. Tires, wiper blades, cabin filters, and oil changes.
Annual Projected Cost ($) $800 ~$100 $800
FUEL ECONOMY
EPA Fuel Economy (MPGe or MPG, combined) 21 70 23
Total Range (mi.) 483-546 320
Fuel Savings or Expenditure ($) ($3,000) $5,750.00 ($1,750)
Annual Fuel Cost ($) $2,700 $950 $2,450
Average annual mileage
Time to charge N/A 10.1 hrs at 240V N/A
ENVIRONMENT
Annual Petroleum Consumption (barrels) 14.9 0.1 12.9
Greenhouse Gas Tailpipe Emissions (U.S. tons per year) 7.3 0 6.4
Price per ton of carbon for 7 year average life ($50/ton) $2,555 $2,240
20
ROBUSTNESS/RELIABILITY
Perform independent research and reach out to other cities.
Track record of technology. Good Fair Good
Expected percentage of up-time in operation. 90%
Can handle expected driving conditions? Yes Yes Yes
Degree to which specialized skills are needed for maintenance. Medium High Medium Does the vehicle support add-ons? Skip if not needed. Yes Yes Yes
DEALERSHIP SUPPORT
Reach out to manufacturers and dealerships.
Dealership support location (in miles) <100 miles <100 miles <100 miles
Warranty coverage and conditions
3 yr/36k miles, 5
yr/60k mi powertrain
8/years, 100k mi
3 yr/36k mi, 5 yr/60k
mi powertrain
Are replacement parts readily available for the vehicle. Yes Yes Yes
STEP 6: Streets to send the comparison analysis back to the requesting department.
Streets to communicate the results of the analysis and work with the requesting department to understand the
cost, carbon, and operational benefits of the replacement vehicle.
STEP 7: Requesting department and Streets select vehicle.
Provide reasons why the vehicle was chosen.
https://www.electrificationcoalition.org/resource/drve/
https://www.fueleconomy.gov/feg/Find.do?action=sbsSelect
https://www.bidscolorado.com/co/portal.nsf/xpPriceAgreementsByCategory.xsp
The vehicle scores highly against the gasoline and hybrid alternatives. The F-150 Lightning is currently being used by the City
of X and has been performing well in similar conditions. There is currently available L2 charging stations in the Rio Grande
Parking Garage. The vehicle is a viable zero emissions candidate to the vehicle currently in use.
RESOURCES
21
ATTACHMENT E: Fleet parking locations and distance to transformers.
1
MEMORANDUM
TO: Mayor and City Council
FROM: Alissa Farrell, Administrative Services Director
THROUGH: Sara Ott, City Manager
MEMO DATE: December 5, 2022
MEETING DATE: December 12, 2022
RE: City of Aspen - Employer Sponsored Housing Program
REQUEST OF COUNCIL: There is no request of Council at this time. This memo is to provide Council
with a summary of the progress thus far on the city’s employer sponsored housing program along with
information pertaining to next steps underway.
SUMMARY: Housing is a complex challenge in the Roaring Fork Valley and for the City of Aspen as
an employer. The city, as an employer, is not immune to the consequences of the lack of affordable
housing. The continual increase in turnover along with the cost of housing are catalysts for innovative,
expansive, and dedicated housing solutions in line with the city’s Total Compensation Philosophy
(TCP). Without comprehensively solving the impactful city employer housing dilemma, the problem
then cascades to the community through diminished services and lack of business continuity.
Consistent with City Council’s affordable housing goal and the city’s TCP, a considerable and
comprehensive focus is necessary to improve the housing predicament for city employees. In the TCP,
which is used as the framework to guide decision making related to all benefit programs such as city
employer sponsored housing, it states the city will provide housing support by:
• Responding to the high cost of living and lack of affordable housing through an array of housing
options.
• Reviewing creative and innovative opportunities on an ongoing basis to further enhance
employee support with housing challenges.
BACKGROUND: The City of Aspen continues to experience unprecedented turnover rates on average
of around 17% for 2022. In part, the high turnover rates are due to the continued affordable housing
shortage which impacts the city’s ability to recruit and retain employees for the community. This is an
increase from years prior when the city benchmarked 10% for a reasonable and realistic turnover rate
based on Employers Council (EC) public sector and resort community survey information. Additionally,
feedback obtained from city applicants on the cost of housing and the lack of housing options remains
a consistent theme. Many applicants withdraw their applications from posted recruitments upon
learning more about the housing market in the Roaring Fork Valley. City positions, particularly those
that often cannot be hired locally, remain unfilled for extended and unprecedented periods of time.
Vacant positions and turnover correlate to the community not being served to the fullest. On top of
applicants withdrawing soon after learning about the housing market, numerous prospective employees
2
have not accepted job offers or have rescinded their job offers because of lack of housing and housing
options. This housing theme is also echoed within confidential and aggregate exit interview data which
reinforce that housing, and the lack of housing is also a contributing factor in an employee’s decision
to leave city employment.
In June 2022, the city distributed an employee housing survey to learn more about city employees and
their housing situations, needs, and how it potentially impacts their longtime employment status with
the city. The survey received 184 responses, close to a 60% response rate. Appendix B includes the
City of Aspen Summary Survey information. Highlights from the survey include:
• 53% of responding employees live in Aspen. 24% of employees live in Carbondale or farther
down valley.
• 80% of responding employees believe that if their housing situation were to improve that it would
be very likely or likely to influence their decision to remain employed with the City of Aspen.
• 97% of responding employees would prefer to own a home while 64% currently own.
For employees, the two driving factors that would move them out of the Roaring Fork Valley are 1) The
Lack of Affordable Housing and 2) The Cost of Living. The survey asked employees about their interest
in specific programs or housing opportunities the city could provide that could alleviate these concerns.
Percentage of responding employees interested in these programs or opportunities:
• Down Payment Assistance Program- 59%
• Shared Equity Program- 51%
• Employee Housing Unit in Aspen- 64%
• Employee Housing Unit in Basalt- 56%
Responding employees are most interested in employee housing units in Aspen with Basalt as a close
second, due to the decrease in commute and being able to work in the same city they reside.
Responses from the employee survey in conjunction with city hiring and employee retention data show
that housing is a barrier to employee’s long-term employment and job satisfaction. When applicable,
employees are significantly more likely to see themselves continuing to work for the City of Aspen and
live in the Roaring Fork Valley if their housing situation or options were to improve. High employee
turnover is both a high cost to the employer and the community.
The City of Aspen maintains an internal, employee housing program designed for city employees that
is separate from the Aspen Pitkin County Housing Authority (APCHA), which has grown to sixty-seven
units. A recent example of the housing inventory growth is the two additional housing units that were
approved by City Council on June 28, 2002, through Resolution #83 and #84, one unit in Snowmass
Village and another by the Aspen Airport Business Center.
The objective of the city’s internal housing program is to prioritize essential and emergency public
services through city positions, which in turn allows for a continued focus on maintaining community
priorities along with providing timely emergency services when needed. Although the city’s housing
inventory remains a critical recruitment and retention tool, turnover rates, exit interview data, and recent
city-wide housing survey reinforce that more innovative options and programs are necessary.
More information pertaining to the City of Aspen’s housing guidelines and inventory are included in
Appendix C.
3
NEXT STEPS: In addition to recent Council approved, housing purchases for the employer sponsored
housing program, staff have gathered employee data through recruitments, exit surveys, stay
interviews and the recent city-wide employee housing survey. Moreover, Finance, Community
Development, and the Asset Department have included financial and real estate information, city
housing maintenance costs and planning as part of the data needed in the evaluation of the next steps.
Staff have recently paused, assessed all data, and determined that the next step is to bring all key
stakeholders together for a workshop in the first quarter of 2023. The objective of this workshop is to
develop a draft city employer sponsored housing strategic plan which would be provided to City Council
for discussion, input, and approval. To develop the draft internal housing strategic plan, the following
items would need to be developed, reviewed and/or refined during the workshop:
• The city’s employer sponsored housing program’s overarching and guiding philosophy as it
relates to the city’s TCP.
• The city’s goals and priorities over the next year and over multiple years. Examples of
prioritization of goals and resources include but are not limited to: acquisition of built units and/or
the development of employer housing units, employer housing geographical location review,
evaluation of the current down payment program and potential expansion, assessment of current
housing guidelines, category criteria and eligibility criteria, and transitional housing policy review.
• Reassessment and alignment of financial planning including the creation of a specific and
comprehensive long-range plan of the city employee housing fund (505 fund) to meet the
proposed housing philosophy, goals, and actionable steps.
• Identify necessary and dedicated resources to support and achieve the city’s employer
sponsored housing goals and priorities. This may include but is not limited to a centralized
staffing allocation request to manage the expansive, multi-faceted city housing program. As
referenced above, currently this program is managed by a myriad of departments in several
areas and is without a dedicated resource.
FINANCIAL IMPACTS: No financial impacts at this time.
Below is an overview of the current City Employee Housing Fund (Fund 505), which is intended to be
further developed for alignment with the City of Aspen’s employer sponsored housing strategic plan
after the planned workshop with key stakeholders:
The city’s employee housing fund is an internal service fund, meaning it is an aggregation of a citywide
program and centralized in its financial planning and accounting. The fund financially supports both
existing and new units created or acquired by the city. The revenues for this fund are generated by:
a) collecting rent from employees on the units made available to them; b) collecting a sale price if the
units are sold to employees (until an employee separates with the city at which time it is repurchased
by the city); and c) internal per full time equivalent/employee (FTE) charges assessed to each
department annually, to build up resources to further the program’s impact on assuring a stable
workforce for the community specifically focused on critical and emergency employees which result in
reliable services. This per FTE charge for 2023 is up to $10,000 annually. This annual amount will be
dependent and re-established to compliment the outcome of the internal housing workshop along with
the forthcoming City of Aspen employer sponsored housing strategic plan.
Presently, at a high level, the annual revenues into the fund equate to roughly $3.8 million, the vast
majority of ($3.5M) attributable to the internal per FTE charge. Of this total, for 2023, roughly $200,000
4
is spent on operational related expenses for existing units and to provide for the down payment
assistance program. The down payment assistance program is available to full time employees in good
standing to help provide a secured, subordinate loan with the purchase of an APCHA or city housing
unit.
For 2023, an additional $325,000 is set aside for other capital maintenance for existing units (items like
roof, furnace, boiler, appliance replacements, etc.).
ENVIRONMENTAL IMPACTS: Environmental impacts will be considered and discussed during the
internal housing workshop and in the development of the city’s employer sponsored strategic plan.
ALTERNATIVES: Council may provide immediate direction and action related to the city’s employer
sponsored housing program in addition to or instead of the city’s internal housing workshop tentatively
scheduled for the first quarter of 2023.
CITY MANAGER COMMENTS:
Appendix A: Total Compensation Philosophy
Appendix B: City of Aspen Summary Survey
Appendix C: City of Aspen Housing Guidelines
Appendix A CITY OF ASPEN
Total Compensation Philosophy
1 | City of Aspen TCP
Total Compensation Philosophy OVERVIEW
The City of Aspen’s Total Compensation Philosophy
provides a framework to guide decision-making on
compensation and benefits programs for employees.
As an employer of choice, the City encourages
an engaged and innovative workforce through
a Total Compensation Philosophy that supports
highly competitive and equitable pay. Employees
that embody the City’s values and mission enjoy
a unique and rewarding mountain culture experience.
City of Aspen EXPERIENCE
The City is committed to providing a Total Compensation Philosophy that attracts, retains,
and rewards a talented and motivated workforce that embraces the City’s Mission
statement and Organizational Values.
MISSION STATEMENT
To engage with positive civil dialogue, provide the highest quality innovative and efficient
municipal services, steward the natural environment, and support a healthy and
sustainable community for the benefit of future generations with respect for the work of our
predecessors.
ORGANIZATIONAL VALUES
SERVICE: We serve with a spirit of excellence, humility,
integrity, respect
PARTNERSHIP: Our impact is greater together
STEWARDSHIP: Investing in a thriving future for all by
balancing social, environmental, and financial
responsibilities
INNOVATION: Pursuing creative outcomes, grounded in
Aspen’s distinctive challenges and opportunities
The City invites employees to bring their passion and experience to affect positive
change through public service. Diverse perspectives, rich ideas, and a culture
with an appreciation for individuality and a sense of belonging are reinforced and
appreciated in the City. To pursue creative outcomes, demonstrate excellence,
and address the distinctive opportunities found in Aspen, the City recruits qualified
and talented employees who are prepared to manage complex and highly
technical challenges.
CITY OF ASPEN
Total Compensation Philosophy
2 | City of Aspen TCP
HOW WE COMPARE OURSELVES
To respond to the unique Aspen environment and labor market conditions, the City will:
• Ensure we are a market leader locally, regionally, and as appropriate, nationally.
• Utilize a comparable labor market that includes both private and public sectors,
as appropriate.
• Regularly evaluate the City’s competitive labor market and compare similar
positions to other organizations whom the City competes with for its workforce.
WHAT WE OFFER
To achieve a sustainable, fiscally responsible, and highly competitive compensation
program, the City will provide the following core Total Compensation programs to City of
Aspen employees:
PAY
• Market-leading pay structures that consider the high cost of living in Aspen and the
surrounding area.
• Pay for similar work that is equitable both internally and externally and applied
consistently across the organization.
• Meaningful merit/performance increases that recognize employee’s contributions
and reflect the varying levels of employee achievements.
HEALTHY LIFESTYLE BENEFITS
• Comprehensive and competitive benefits programs designed to support the health
of City employees and their families.
• Robust employee benefits that encourage awareness of individual health and offer
resources to pursue healthy lifestyles.
• Benefits that are inclusive and meaningful at a variety of life stages.
• Work-life balance enhancements through offerings such as alternative work
schedules, employee wellness programs, and ancillary benefit programs.
PAY COMMUNICATION
• Clarity and transparency in managing the total compensation system.
• Communication of the value of the total compensation package offered to City
employees.
• Guidance and oversight in pay decisions to ensure fairness and consistency.
CITY OF ASPEN
Total Compensation Philosophy
3 | City of Aspen TCP
WHAT WE OFFER - CONTINUED
PROFESSIONAL DEVELOPMENT & CONTINUOUS LEARNING
The City seeks to retain and develop employees by providing opportunities for learning
and professional development. The City and employees both play critical roles in
maintaining the success of a professional development culture.
• Foster a positive work environment that is meaningful, stimulating, and encourages
employee innovation and creativity.
• Provide a range of learning and professional development opportunities for all
employees that support personal and professional growth.
• Offer ongoing and timely communication to employees on their performance,
goals, and professional development throughout the year.
REWARDS & RECOGNITION
• Acknowledge and celebrate employees’ contributions that align
with the City’s mission statement and organizational values.
• Provide financial and non-financial incentives
for extraordinary and exemplary performance.
• Reward employees by offering learning opportunities
to promote professional growth and development.
HOUSING SUPPORT
• Respond to the high cost of living and
lack of affordable housing through
an array of housing program options.
• Review creative and innovative
opportunities on an ongoing basis
to further enhance employee support
with housing challenges.
Appendix B
City of Aspen Employee Housing Survey: Summary
In June 2022, the city distributed an employee housing survey to learn more about COA
employees housing situations, needs, and how it potentially impacts their longtime
employment status with the city. The survey received 184 responses.
Highlights from the survey include:
• 53% of responding employees live in Aspen. 24% of employees live in Carbondale or
farther down valley.
• 80% of responding employees believe that if their housing situation were to improve
that it would be very likely or likely to influence their decision to remain employed with
the City of Aspen.
• 97% of responding employees would prefer to own a home while 64% currently own.
As shown by the chart above, there is a wide split in the amount of stress employees
experience during to their housing situation. Employees either have long-term, secure housing
or they don’t; there is less room for in between.
For employees, the two driving factors that would move them out of the Roaring Fork Valley
are 1) The Lack of Affordable Housing and 2) The Cost of Living. The survey asks employees
about their interest in specific programs or housing opportunities the city could provide that
could alleviate these concerns.
Percentage of Responding Employees Interested in Programs or Opportunities:
Down Payment Assistance Program- 59%
Shared Equity Program- 51%
Employee Housing Unit in Aspen- 64%
Employee Housing Unit in Basalt- 56%
Responding employees are most interested in employee housing units in Aspen, due to the
decrease in commute and being able to work in the same city they live in.
Appendix C
1 | Page
Revised June 2017; Revised November 2022
City of Aspen’s Employer Sponsored Housing Guidelines
The City of Aspen has an employer sponsored housing program, separate from the Aspen Pitkin
County Housing Authority (APCHA), available to city employees. The objective of this program is
to help the city recruit and retain an exceptional workforce which in turn, provides business
continuity and services to the Aspen community.
The housing category which determines the cost of the unit, is established according to
household income levels similar to the APCHA process.
The employer sponsored affordable housing inventory available for sale or rent to city
employees currently includes the following:
Table 1. City of Aspen Employer Sponsored Housing Inventory
Location # of Units Unit Types Unit Categories Priority / Use
Cemetery Lane 4 Two 2-bedroom
Two 3-bedroom
Fluctuates Based on
Income
No Stated Priority
Rental or Ownership
Burlingame 3 One 2-bedroom
Two 3-bedroom
Fluctuates Based on
Income
No Stated Priority
Ownership Only
Aspen Recreation
Center (ARC) 1 2-bedroom Category 3
Priority for
Recreation & Police
Staff
Rental Only
Animal Shelter 2 One 1-bedroom
One 2-bedroom
Category 2
(1 bedroom)
Category 3
(2 bedroom)
Animal Shelter Staff
Prioritized
Rental Only
Truscott 14
Three Studio
Eight 1-bedroom
Three 2-bedroom
Category 2
Category 3
No Stated Priority
Rental Only
Anderson Park 1 One 2-bedroom Fluctuates Based on
Income
Parks Staff Prioritized
Rental Only
East Hopkins Ave 1 Studio Fluctuates Based on
Income
No Stated Priority
Rental or Ownership
Alpine Grove 2 Two 2-bedroom Fluctuates Based on
Income
Transitional Units
Rental Only
Parks Campus 1 One 1-bedroom Category 2 Parks Staff Prioritized
Rental Only
Water Place 24
Three Studio
Six 1-bedroom
Seven 2-bedroom
Fluctuates Based on
Income
No Stated Priority
Rental or Ownership
Appendix C
2 | Page
Revised June 2017; Revised November 2022
Six 3-bedroom
Two 4-bedroom
Marolt Open
Space 1 One 3-bedroom Fluctuates Based on
Income
Existing Agreement
Rental Only
Marolt Seasonal 3 Three 1-bedroom Fluctuates Based on
Income
Six Month
Transitional
Rental Only
550 Main Street 8
Three 1-bedroom
Three 2-bedroom
Two 3-bedroom
Fluctuates Based on
Income
No Stated Priority
Rental or Ownership
Aspen Mini
Storage 1 One 1-bedroom Fluctuates Based on
Income
Priority for Mini
Storage Support
Rental Only
Snowmass Village 1 One 2-bedroom Fluctuates Based on
Income
No Stated Priority
Rental or Ownership
All Units 67
Although Truscott and Marolt have additional flexibility in terms of employment eligibility, in
general, there are three categorizations below, not listed in order of priority, of full-time
employment to be considered to have priority for city housing before a unit then becomes
available to all full-time employees:
• Emergency Response Employees defined as employees that regularly and frequently
partake in standby practices or other emergency response activities. These positions
include but are not limited to police officers, electric line technicians, certain utilities
positions, or as designated by the City Manager. Positions may vary pending the needs
of the city.
• Critical Recruitment and Retention Employees which includes but is not limited to
assessing the number of qualified applications for a position, the specific job
qualifications, and the length of time to fill past, similar positions. Applicable positions
shall vary dependent on the job market. Other criteria may be included in the
assessment and approved by the City Manager.
• Agency Director and Department Head positions. An Agency Director is defined as an
executive position in charge of one or more departments who reports directly to the
City Manager (reference Ordinance No. 01, Series of 1985). A Department Head is
defined as the chief administrative personnel in charge of a department.
All full-time city staff are welcome to apply for open units. Applicants are reviewed based on
the above criteria first. Should no applicant meet the criteria, a thorough review of
applications will be conducted, and an applicant will be selected based on organizational needs.
Appendix C
3 | Page
Revised June 2017; Revised November 2022
Some units listed above may include additional costs including but not limited to HOA dues.
Employees must be in good standing to be considered for City of Aspen housing.
Transitional Housing:
Transitional housing options may be available for up to six to twelve months, pending the unit
and circumstance. Employees may qualify for transitional housing based on their situation,
examples include new employees that meet the priority criteria or an employee losing their
current housing due to a major life transition.
When determining the purchase price or rent of the unit, the city uses the APCHA category
guidelines. Because recruitment and retention of city employees fluctuates drastically over
time, the City Manager maintains authority to deviate from the above criteria when necessary
to meet the objectives of the City of Aspen. This authority is reserved for extreme situations.
Additionally, the owner or renter must not own developed residential real estate that has an
address within the Roaring Fork River Drainage areas situated in Eagle, Pitkin, Garfield or
Gunnison counties, or with the Colorado River Drainage area from and including the
unincorporated No Name area to and including Rifle, and including, but not limited to, Aspen,
Basalt and Carbondale, El Jebel, Glenwood Springs, Marble, Meredith, New Castle, No Name,
Redstone, Rifle, Snowmass, Snowmass Village and Woody Creek. This is consistent with the
APCHA exclusion zone.
The above information is a summary only of the City of Aspen’s internal housing program.
MEMORANDUM
TO: Mayor Torre and Aspen City Council
FROM: Ben Anderson, Deputy Director, Community Development
THROUGH: Phillip Supino, Community Development Director
MEMO DATE: December 5, 2022
MEETING DATE: December 12, 2022
RE: Work Session Discussion – Certificates of Affordable Housing
Credits Program and a Specific Question Related to Affordable
Housing Mitigation for Redevelopment Scenarios.
REQUEST OF CITY COUNCIL:
Council is asked to review staff’s memo regarding the Certificates of Affordable Housing
Program and related materials, including an analysis of aspects of the program provided
by Design Workshop (Exhibit A).
While the AH Credits Program is the focus of the Work Session, the staff memo
additionally discusses a topic that arose during the Moratorium related to affordable
housing mitigation and the consideration of a further deferment or reduction of mitigation
fees for full-time, local, residents in residential redevelopment scenarios.
At the Work Session, Council will be asked to discuss and provide direction on potential
changes to the Land Use Code in response to these issues.
SUMMARY AND BACKGROUND:
The Certificate of Affordable Housing Credits program is an Aspen specific tool that is
intricately intertwined with our growth management and affordable housing mitigation
requirements in the Land Use Code (LUC). The program was conceived as a mechanism
to encourage private sector development of affordable housing and is importantly
dependent upon Aspen’s long legacy of requiring new development to provide the
housing needs generated by its impacts.
Since its inception in 2010, the program has been successful - housing for 124 FTEs has
been created and units housing an additional 54 FTEs either have Land Use (LU)
approval or are currently in review. These units have been developed by the private sector
with little or no cost to the City of Aspen. This was the ultimate intent of the program.
As it was initially conceived and functioned until recently, the program has produced small
scale projects with condominiumized units that have been sold to owners through
APCHA’s lottery system. The developers who built projects then sold their credits in
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 2 of 10
fractional increments in the market (in some cases over years) to residential or small
commercial projects that had mitigation requirements.
The last few AH projects that have received AH Credits have started to reflect new trends
in the affordable housing market and related general development context:
1) AH Credits projects cannot be profitable utilizing the sale of units to APCHA
qualified owners through the lottery system.
2) Instead, units – or entire projects are being sold to employers who then rent the
units to their employees at APCHA rental rates. Importantly, these sales to
employers are not bound by APCHA sales price limits and are instead priced
by market forces.
3) It has been revealed to staff, that some AH units created by the program are
being leased to specific employers at market rate prices. The employer then
rents the unit to their employees at APCHA rental rates.
4) Some units or entire projects are being held by the developer - who is then
renting to APCHA qualified tenants or to employees related in some way to
other businesses they have interest in.
5) The incremental sale of fractional credits to meet small mitigation requirements
has almost entirely dried up.
6) Instead, large commercial and lodge projects have either developed AH
projects to meet their own mitigation needs or have purchased large batches
of credits from other developers. These credits have essentially been pulled
out of the market – but will eventually be extinguished as mitigation
requirements.
These trends are objectively neither good nor bad but reflect new realities that were not
fully conceived of at the origination of the program.
Current concerns about the program
While the program has been unquestionably successful as creating AH units at no
financial cost to the City, long-standing questions about AH Credits and the intersections
with the new trends identified above – raise concerns:
• The success of the AH Credits program to produce new units is dependent on the
continued development growth in our residential, commercial, and lodge sectors.
Without this growth, there is not sufficient demand for the resulting AH Credits.
Members of City Council and the community concerned about Aspen’s growth
patterns continue to raise reservations about this fundamental relationship.
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 3 of 10
• It has been expressed that the AH Credit program serves as an outlet that allows
developers of larger commercial and lodge projects to not provide on-site AH units
for employees – which for some in the community should be a primary outcome of
any affordable/employee housing.
• While AH Credits projects have recently been completed and more are in the
pipeline – there is an acute shortage of AH Credits in the market to meet mitigation
requirements for residential and small commercial projects. This has resulted in
the need for a process with Council to request Fee-in-Lieu in meeting mitigation
requirements for projects that otherwise would have used credits. This
development also introduces additional procedural delays for owners seeking to
expand or redevelop their property and administrative burdens for staff already
busy with significant workload constraints.
• There is a lot of effort and focus placed on the Credits program by staff and the
development community. It requires work at several moments in the development
process both for projects that are developing AH units and for projects that have
mitigation requirements. At times there are questions if it is worth the effort; if
enough AH units are being created through the program to justify these efforts.
Staff acknowledges these concerns and more with the AH Credits program. We feel
strongly that there are improvements that could be made to better implement the program
and use the tool to encourage more AH projects toward completion. Most importantly,
despite these very real challenges, we see evidence in the past success of the program
and the opportunities that expansion and increased flexibility of the program could offer.
In short, we think the program has and could do more in shifting the responsibility of
production of affordable housing away from the City of Aspen. The discussion below
illuminates some of the possible changes to the program that could be made.
STAFF DISCUSSION:
In framing this discussion, staff has made an important assumption based on previous
Council direction:
The Certificates of Affordable Housing Credits Program has successfully
encouraged private sector production of affordable housing units and Council
desires to continue to improve and promote the program.
If Council wishes to discuss this basic premise, staff will be prepared for a more general
discussion before we get into specific policy or tactical changes. If not, the discussion is
planned to focus on the topics identified below and staff will ask for direction from Council
on each of the Policy Objectives and Possible Tactics identified.
The identified objectives and tactics are a result of staff and consultant analysis. This
analysis has consisted of research of practices utilized by other communities in the
development of affordable housing; interviews with local employers, developers, and
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 4 of 10
representatives of financial institutions; and the creation of case studies utilizing specific
Aspen properties and producing pro forma for private sector AH development scenarios.
Certificates of Affordable Housing Credits - Policy Objectives
1) Encourage and provide flexibility in the development of diverse unit types.
Rationale:
The community, through APCHA regulations and the Land Use Code, has encouraged or
discouraged different kinds of AH units over the years. One of the mechanisms used
more recently to produce the types of units the community desires has been the AH
Credits program. Currently, credits can only be generated from units that are Categories
1-5, and units that are studios, or contain defined bedroom counts (generally, 1-3
bedrooms per unit). As staff and our consultant team talked with community members
during the moratorium outreach, and with organizations and developers during more
recent interviews, desire for flexibility in unit types and configurations was clearly
expressed. Changes to these regulations could generate interest in AH projects that are
not currently being contemplated and in the encouragement of potential redevelopment
or renovation of projects that are bound by expiring deed restrictions.
Possible Tactics:
• Allow for the issuance of AH Credits to the development of Resident Occupied
(RO) units. Currently credits are only available to units that are deed restricted at
Category 5 and below. This tactic could be coupled with controls on Category mix
within a development to ensure a balance commensurate with community needs.
• Allow for the issuance of AH credits for dorm-style or co-housing unit
configurations. Currently credits are only available to studio units and units with
designated bedrooms.
• Consider mechanisms of AH Credit Issuance for housing that is designed or
programmed for seasonal employee housing.
2) Acknowledge and respond to the needs of private and public sector
employers in encouraging the development of affordable housing.
Rationale:
The AH Credits program, as currently designed, is limited to the issuance of credits for
projects that are built by private developers operating independently. In our interviews, it
was clear that private sector, non-profit, and quasi-government (examples: Aspen School
District or Aspen Valley Hospital) have potential interest in the credits program – either in
pursuing projects themselves or in partnership with developers. There are two issues to
resolve: 1) The language in the LUC currently prohibits non-profits or quasi-governmental
organizations from pursuing credits – either independently or in partnership; and 2) There
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 5 of 10
is uncertainty (either real or perceived) for organizations in pursuing deed-restrictions with
APCHA in the limitations or inflexibility that may be present that would preclude them from
most effectively housing their employees.
Possible Tactics:
• Provide clarity and flexibility to employers who establish housing for their
employees in the relationship between APCHA deed restriction requirements and
the potential issuance of credits.
• Remove or modify the current restriction that prohibits non-profits or quasi-
governmental organizations or organizations working in partnership with
governments to pursue AH Credits in the development of AH projects.
• Provide clarity to APCHA regulations and the Land Use Code in the allowed
relationships of the developer to future owners and residents (employer v. tenant
owners, etc.).
3) Acknowledge the changing economic and housing dynamics, and the
shared housing challenges in the Upper Valley within the AH Credits
program.
Rationale:
Acquiring land and building is increasingly expensive throughout the Roaring Fork Valley,
but Aspen is prohibitively so. Actions in this area could provide flexibility in the locations
where AH projects pursuing credits are built to identify more affordable sites that would
still offer proximity to services and employment for Aspen’s workers and families.
Possible Tactic:
• Create a new geography for where AH projects can pursue AH credits. Currently,
the UGB provides the boundary where AH projects can pursue AH Credits.
Alternatively, a new boundary, like the Aspen School District boundary, could be
used to further encourage and make possible the development of AH projects (that
could be granted Aspen’s AH credits).
4) Increase the usefulness of the value of AH Credits in an AH project’s
financial pro forma.
Rationale:
Staff has heard for years concerns from the development community about a fundamental
shortcoming in the AH Credits program: Banks and other financial institutions do not
recognize or have significant difficulty in recognizing the value of AH Credits in a project’s
proforma. While the eventual value of the AH Credits can be a significant stream of
revenue, this value is often ignored in evaluating a project’s “equity stack.” What this
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 6 of 10
means is that only certain types of developers carrying out smaller projects that do not
need institutional financing can make a Credits project work.
Possible Tactics:
• Identify mechanisms to bring more usefulness to the value of AH Credits in an AH
project’s financial proforma. This could involve the City guaranteeing the value of
a credit or a portion of a credit – or the City becoming a purchaser of AH Credits.
Either of these would likely involve the use of the 150 Fund or other City financial
assets.
• Consider alternatives in the timing of the issuance of AH Credits within an AH
project’s development timeline.
5) Consider the possible role of AH Credits as an incentive for actions within
the larger affordable housing program.
Rationale:
“Infill” development, “development neutral” AH, encouraging the most efficient use of
current AH housing stock, and resolving the expiring deed restriction issue, all require
creative and likely, property by property evaluation of potential solutions. This set of
potential tactics would create flexibility in the AH Credits program using Credits as one of
the tools in the tool belt in incentivizing desired outcomes across Aspen’s AH programs.
Possible Tactics:
• Utilize AH Credits as one of the tools available in encouraging the conversion of
expiring deed restrictions to permanent affordability.
• Identify and implement areas of increased flexibility in the issuance of AH Credits
for development neutral AH projects (conversion of existing market-rate units).
• Explore the possible role of AH Credits as an incentive in APCHA’s right-sizing
efforts or in encouraging mobility of owners from Category units to RO units.
6) Even with all of the other tools and incentives available, additional, direct
subsidy may be necessary to make AH projects an attractive alternative to
market-rate development.
Rationale:
It has become the case that the combination of costs related to land acquisition and
construction in the Aspen-area have become true obstacles in the development of the
projects that the AH Credits program was established to encourage. While staff has
worked over the last couple of years to increase the Fee-in-Lieu in response to these
costs (setting the approximate value of AH Credits), it has not been enough. While a
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 7 of 10
subsidy would change the very nature of the AH Credits program from a pure market
incentive to a form of a private-public partnership, it may still deliver AH units at a lower
community cost than the City-as-developer model.
Possible Tactics:
• Identify possible funding sources for direct subsidy (on top of the credits program)
to encourage private sector AH projects.
• Create an RFP process or simply a list of standards for projects that would be
eligible for a direct subsidy.
Response Previous Questions about the AH Credits program from City Council
In recent discussions with City Council, two questions arose that staff agreed we would
respond to during this work session:
1) Do we have an understanding of whether some holders of credits are
speculating on the supply and demand of credits market and the price that
credits are being sold at?
Staff has tracked the sales price of credits over time. With a few exceptions,
credits have generally sold for prices very near the equivalent of established
Fee-in-Lieu values. Recently, the larger issue is that unextinguished credits
are simply not available for sale. Staff has no basis to believe that this dynamic
is a result of credits holders waiting until the market delivers a higher return.
Based on staff discussions with some credit holders, it is more likely that the
need for credits to mitigate AH requirements for their own future development
activities outweighs the financial incentive of bringing the credits to market.
2) What kinds of projects can Credits be made available in supporting?
Credits are issued to projects that have a Certificate of Occupancy and a
recorded deed restriction that complies with APCHA’s requirements. Projects
can be new construction or converted free-market units that meet APCHA
development standards. After that, the following scenarios for who is living in
the units are all legitimate under current code:
• Projects that are sold to APCHA qualified owners through the lottery
system.
• Projects that are held by the developer and rented to qualified APCHA
renters.
• Projects or units that are sold to employers to rent to employees under
APCHA guidelines
• Projects or units that are leased to employers that then rent to
employees under APCHA guidelines.
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 8 of 10
Questions for Council:
1) Does Council desire staff to propose improvements to the AH Credits program?
2) What are the Policy Objectives or Possible Tactics that seem most important
or in line with Council expectations?
3) Are there Policy Objectives or Possible Tactics that Council does not wish for
staff to pursue further?
4) Are there any ideas that Council has for possible improvements that staff has
not identified?
Next Topic – Affordable Housing Mitigation – further deferment or reduction for
resident locals who pursue redevelopment of their property.
During the moratorium outreach and discussions with Council, and in response to
elements of Ordinance #13, Series of 2022 that had the effect of increasing AH mitigation
requirements for residential redevelopment scenarios, suggestions arose that local,
resident owners should be acknowledged in this system differently than other property
owners. Staff suggested and Council agreed that we would not respond to this issue
during the moratorium but would revisit later in 2022.
There were two scenarios that were presented to staff. The first was a resident who
redeveloped their home and continued to live in it following redevelopment. In this case,
the suggestion was that AH mitigation requirements, in combination with the already
existing deferral agreement, could be reduced for each year they continued to live full-
time in their home.
The second scenario looks backward at the years that a full-time resident has lived in
their home. The proposal in this case is that a resident would receive a “credit” towards
future redevelopment mitigation requirements based on the number of years they have
lived in their home. The argument here is that these residents have already provided
“mitigation” by housing resident locals and in doing so have contributed to the larger
housing program over time. In this suggestion the credit would be available to the
property regardless of who eventually redeveloped the home.
Staff’s view on the matter is that the existing deferral agreement is fair response to the
concern that the City’s mitigation requirements are overly burdensome on local, resident-
owners. There is also the potential that such a credit, either retroactive or applied after
redevelopment and occupancy, could constitute a financial benefit, aside from the
deferred AH mitigation costs, conferred by the City upon specific residents and properties.
Additionally, on the surface, both scenarios would be difficult to administer fairly and
consistently over time. For these reasons, staff has concerns about the pursuit of either
of these basic frameworks.
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 9 of 10
If Council were to desire staff to pursue land use code changes in support of either or
both scenarios, it should be acknowledged that the difficulty would be in getting the details
right and it will take some time for further analysis.
Question for Council: Does Council desire staff to investigate this topic further and return
to Council with a proposal for a Code Change in response?
CONCLUSION AND NEXT STEPS:
Staff and our consultant team are aligned in our perspectives on the role of the Affordable
Housing Credits program in Aspen’s larger efforts of AH development and on the current
status of the program:
1) It has successfully produced AH units over time.
2) The program has fundamental challenges, most notably:
• The inability of financial institutions to recognize the value of AH credits
in a project’s financial pro forma.
• The AH Credit’s market health depends on a close and aligned
relationship between new market rate development (commercial,
lodge, residential) and new, private sector AH development. When not
aligned, shortages and surpluses in the market result – and have the
potential to undermine the program.
3) Since the program’s inception, there have been important changes in the local
development context – particularly related to land acquisition and development
costs. Additionally, the housing-employee nexus is presenting new and
unprecedented challenges for employers.
4) The extreme nature of Aspen’s real estate context requires tools not found in
other communities in the development of AH.
5) We should be providing as many tools and as much flexibility as we can in
encouraging both developers and employers to participate in the creation of
new AH units.
Encouragement of private sector AH development requires a layering or a stacking of
incentives, regulatory and process flexibility, and perhaps, direct subsidy at some level.
It is staff and the consultants’ perspective that the AH Credits program is an important
part of this “stack”, but it needs improvements to its tools and additional flexibility in its
application.
Should Council desire to see changes to the Land Use Code in response to the
discussion, Staff would return to Council in 2023 to initiate a formal Code Amendment
process.
Staff Memo, Work Session – 12/12/22
AH Credits Program
Page 10 of 10
RECOMMENDATIONS: Staff recommends that Council provide direction for potential
Land Use Code changes on both the AH Credits program and AH mitigation topics.
EXHIBITS:
A – Memo, Design Workshop – AH Credits Program Analysis
B – Letter from Headwaters Housing Partners in support of program improvements.
Page 1
MEMORANDUM
To: City of Aspen, Phillip Supino, Ben Anderson, and Garrett Larimer
From: Design Workshop, Jessica Garrow and Eric Krohngold
Date: December 5, 2022
Project Name: Aspen Moratorium Support
Project #: 6829
Subject: Affordable Housing Credits Analysis
Overview and Background
This summary document outlines the opportunities and challenges of the City of Aspen’s Certificates of
Affordable Housing Credits Program (Section 26.540 of the Land Use Code). This award-winning program
was originally established in 2010 through a citizen initiated code amendment. The program created a new
system to encourage the private development of affordable housing.
The city has long required affordable housing mitigation for most development, and this program created a
mechanism for a developer to build affordable housing without a mitigation requirement. Based off the
principles of a transferable development rights program, the credits program allows a private developer to
build new affordable housing units and sell a “certificate of affordable housing credit” (herein after called
“housing credit”) to another developer who has a separate housing mitigation requirement. This program
enables the housing developer to rent or sell the housing units to qualified local working residents and to
separately sell the housing credit, creating an additional revenue stream for the project that would help
make it financially viable.
Since its inception, the program has resulted in the creation of housing for 124 FTE (mix of categories), the
most recent being completed in 2022. Additionally, projects proposing 54 FTEs have LU approvals or are in
review. The housing credits created from these units has been used to mitigate single family homes,
lodges, commercial spaces, and multi-family units instead of those project building one-off housing units or
providing a cash-in-lieu payment.
Since the original program, some modifications were made related to the units and entities that qualify for
the housing credits. The current program includes the following key elements:
• Credits are only given to affordable housing units that are created on a voluntary basis (no
mitigation obligation).
• Any affordable housing units that were previously approved or built as part of a Development
Order are not eligible. This means that if a project included more affordable housing units than
was required before the housing credits program was created, those units cannot be “converted”
into housing credits after the fact.
• Credits may only be established from housing units that have an adopted cash-in-lieu rate, which
is currently Categories 1 – 5 (see Section 26.470.050.e of the Land Use Code).
• Credits can be transferred between Categories by following the conversion methodology in the
Land Use Code.
Landscape Architecture
Planning
Urban Design
Strategic Services
120 East Main Street
Aspen, Colorado 81611
970.925.8354
designworkshop.com
Exhibit A – Design Workshop
AH Credits Program Analysis
Page 2
• Dormitory units are not eligible in the program – only studio and bedroom units are eligible.
• Credits may only be established from projects within the City of Aspen Boundaries.
• Units that are created by the City of Aspen, Pitkin County, APCHA, or any similar governmental or
non-governmental organization that receives public funds for the purpose of building affordable
housing units are not eligible. This means that any non-profit that receives public funds through
bonding, taxes, assessments, tax breaks, grants, and the like for the development of affordable
housing is not eligible.
• All units must be approved through the city’s Growth Management Quota System and deed
restricted through APCHA.
• Credits can be issued to a developer at the time of the Certificate of Occupancy, or may be
phased at the completion of a foundation inspection, framing/roofing inspection and final
Certificate of Occupancy if the developer provides a financial guarantee for the project’s
completion.
Program Challenges
While the program has resulted in a significant number of new affordable housing units in the community,
the number of projects utilizing the program has decreased over the years. At the same time, the need for
affordable housing in the community has not decreased, and new development that generates housing
mitigation obligations has continued. The result is a program that continues to have great potential but has
structural and financial challenges.
Lack of Available Credits
While there are credits for approximately 62 FTEs (full-time equivalents) that have been established but not
utilized by other development, there are currently no housing credits available for purchase. Because
credits are sold on the free-market, it is up to the credit holder to determine if and when they want to sell
and at what price. Based on information gathered during project interviews, a few individuals are holding
onto the remaining credits with the intention of utilizing them for future project needs. This means that
current projects with a housing mitigation requirement, even smaller ones like the development of a single-
family home, are not able to buy and use a housing credit for their project. This has resulted in the need for
projects to utilize other methods, most frequently cash-in-lieu, which does not result in the immediate
development and mitigation of their housing impacts and pushes the burden of providing new affordable
housing units onto the City of Aspen.
Inability of Financial Institutions to Value Credits
Despite significant early successes in the program, what has become clear is that most developers of
affordable housing credits projects have not been able to utilize traditional financial institutions to help fund
projects. Because the program is unique to the City of Aspen and no other similar program exists in the
country, national financial institutions do not have a process for lending against housing credit projects. The
primary challenge lies in a developer’s ability to secure debt for the construction of a project. Because there
is no set or guaranteed market or value for the credits, financial institutions are unable to recognize them as
collateral, and thus are unable to lend against a project that includes them as part of its capital stack. For
these reasons, financial institutions are unable to determine how to value the housing credits portion of a
project. This limits the number of developers who are able to pursue such projects to those who can self-
fund or draw upon local sources of private equity.
Page 3
Issuance of Credits for RO Projects
When it comes to the credits program, there are two key code sections that govern the creation of housing
credits. The first is the Housing Credits section (26.540) which outlines the overall requirements for the
projects. The second is Growth Management (26.470.080.d.7.a-d), which outlines the basic requirements
for the creation of any affordable housing units. Section 540 states that a housing credit project can be
“designated at any Category with established cash-in-lieu rates in the Housing Guidelines.” The guidelines
and the Growth Management code include cash-in-lieu rates for Categories 1- 5. This means that Resident
Occupied (RO) units are not eligible for housing credits, which limits the potential for a credits project
developer to balance their financing and cash flow needs.
Inability to Issue Credits to Non-Profit Entities
The limitation of the housing credits program related to non-profits is a bit unclear and creates an
assumption that non-profits cannot participate in the program. The language limits participation to private
developers and any governmental or non-governmental entity like a non-profit that does not receive public
funds for housing. This means that if a non-profit that might typically address issues like recreation or the
arts receives a grant to build affordable housing, they would not be able to develop a housing credit project
– they would need to self-fund that project. Conversely, if the same organization receives a grant or other
public money for their operations and separately self-funds a housing project, they would be eligible to
participate in the housing credits program. The result is confusion about how non-profits can or cannot
participate in the program.
As part of project interviews, it became clear that some non-profits are interested in developing affordable
housing units absent a housing mitigation requirement. If a private developer or employer desired to do
such a project, they would qualify for a credits project. However, it is unclear if non-profits could participate
in the development of a housing credits project in the same way a private employer would.
Land Costs, Construction Costs, and Predetermined Sale Prices
Development within the City of Aspen is amongst the costliest in the nation, due in large part to exorbitant
land and construction costs. For an affordable housing unit to qualify for a housing credit, units must be
leased or sold at APCHA designated prices. This leaves the sale of housing credits on the private market
as the only financial recourse that a developer has in order to yield a profitable project.
If a developer is unable to sell their housing credits at their desired price, then they are unable to become
financially whole for the project. This makes affordable housing development in Aspen much riskier than
traditional market-rate development where a profitable project is all but guaranteed.
Carrying Costs Relative to Review Times
The timeline of development in Aspen can be lengthy due to permitting and review times. This additional
time can have significant financial impacts on development. This added review time in conjunction with the
fact that housing credits can only be issued either once a Certificate of Occupancy is obtained, or at
intermittent times during the development process, means that there can be significant financial burden
placed on a developer to carry the project though the development process. These carrying costs can
quickly add up and make it increasingly difficult for a project to be financially feasible.
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Interview Summary
In October 2022, Design Workshop and the City of Aspen conducted interviews with two major employers
(Aspen Valley Hospital and the Aspen Ski Company), two financial institutions (Alpine Bank and ANB
Bank), and a private owner of existing multi-family units (Copper Horse and Alpina Haus) on the subject of
the Affordable Housing Credits Program. These interviews covered issues regarding the accessibility of the
Credits Program, barriers to development, and possible changes that could encourage more interaction
with the Credits Program. Key themes from these interviews are outlined below:
Lack of Guaranteed Value
All of the interviewees responded that the biggest hurdle in utilizing the current affordable housing Credits
Program is that the credits do not currently hold any guaranteed value. As a result, the credits cannot be
used as collateral to pay back loans necessary for the development of an affordable housing project.
Additionally, the lack of transparency about the number of credits in the marketplace makes it difficult to
determine how long it may take credits to sell. Some interviewees said that they are in favor of changes to
the credit program that includes the city guaranteeing the value of credits for the purpose of securing
project financing.
The financial institutions also indicated that a beneficial change to the Credits Program may be to have the
credits issued at the beginning of a project. Additional phasing for the credits before the foundation
inspection could be incorporated into the code through a mechanism to guarantee repayment of the
amount financed, such as a general obligation bond/municipal bond or letter of credit backed by the city.
Each of the financial institutions interviewed also indicated their organizations would happily issue dept on
a Credits Project within the community. Involvement in programs related to the Community Reinvestment
Act, such as the Affordable Housing Credits Program, is able to grant them higher ratings from financial
regulators due to the social benefit brings to the local community.
Limitation on Unit Types Eligible for Credits
Employers that were interviewed have experience in developing and/or acquiring housing projects within
Aspen and the Roaring Fork Valley in order to house their employees. One of the organizations expressed
frustration around the current Affordable Housing Credits Program in that dormitory style housing projects
are not currently eligible for credits. This particular employer employs primarily seasonal workers who are
currently housing themselves in market rate units throughout the Roaring Fork Valley, often commuting
from up-valley into Aspen. This employer noted that its seasonal employees would, in most cases, be
willing to live in dormitory style housing it if meant being more proximate to work. They also noted that
transitioning these seasonal workers to dormitory style housing would mean that currently occupied rental
units would likely be made available throughout the valley. The interviewee said that these if dormitory style
development projects were eligible for affordable housing credits, the project would have greater financial
feasibility and could more easily be developed. They noted that if the city and APCHA’s goal is to provide
the most affordable housing possible, then dormitory style housing should be eligible to receive affordable
housing credits when it is the most appropriate style of housing for a particular situation.
Employer Developed Housing Usage
Each of the employers interviewed expressed that any units they developed would need to be available to
their employees. These organizations, as well as others that have participated in past conversations,
expressed a specific concern that some of their staff in the most need of stable housing are those who are
seasonal workers or may not have a four-year work history. While they are desirous of developing
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affordable housing units, they would only utilize the credits program their employees, at their discretion,
could utilize the units. This ability is currently allowed as part of the Growth Management review, but
making it clearer in policy documents and the code could help alleviate these concerns.
Expanding Where Credits Projects May Take Place
Many of the interviewees pointed out that the city should explore expanding the boundary where credits
can be used to finance projects. This way more opportunities are opened up for the development of
affordable housing. Some interviewees agreed with the idea of allowing credits to be created beyond the
current urban growth boundary, but with the value of the credits being reduced so as to disincentivize
sprawl throughout the valley. They pointed out that regional solutions to housing are important but providing
credits to developments where someone still has to drive into town and exacerbating the traffic in the valley
is not the solution we need. One interviewee described this as an opportunity to create affordable housing
in areas that people desire to live, rather than forcing the credits to be used in areas of town where
affordable housing development may not fit the surrounding context.
Credits for RO Units
Another option that interviewees were interested in exploring was allowing credits for RO units. One of the
largest perceived issues impacting affordable housing is unit turnover. By developing more RO units, the
city and APCHA have the opportunity to incentivize residents of other category housing to downsize or to
move into a newer RO units, and in turn opening up their Category unit to others in the community.
Transparency
An idea that was raised during the interviews was if the city or APCHA could develop a dashboard related
to credits that would show information such as average credits available each year, how many have been
extinguished, the current value of credits, how many credits your organization may have, and other basic
market data that could help inform credit backed developed.
Quantifying the Fiscal Gap in Affordable Housing Projects
In order to understand the current viability of housing credits projects in the city, Design Workshop
analyzed development potential, costs, and revenues for three sample properties. These properties are
located in the Residential Multi-Family (RMF), Affordable Housing Planned Development (AH-PD) and
Moderate Density Residential (R-15) zone districts. These zone districts and sample properties were
selected because they are the zone districts and areas where the city has identified the most opportunity
for future affordable housing development. It is important to note that no specific property is referenced in
these, but there may be similarities to individual properties. As is seen in the individual models below, the
current housing credits program is not financially feasible for these projects, and it is more likely a property
owner would sit on an existing building and complete remodels and renovations or would develop a single-
family home.
For each scenario, Design Workshop created a basic mathematical model to understand the development
potential and the likely associated costs and revenues. This analysis leads to an understanding, at a high
level, of if a project is financially feasible for redevelopment through the Affordable Housing Credits
Program. This does not account for potential outside factors, such as individual property owner goals,
reviewing multi projects for redevelopment as part of a larger project, variables in construction financing,
and the like. The analysis takes city dimensional requirements, including potential parking requirements,
heights, setbacks, and floor areas into account, as well as required APCHA minimum unit sizes. Each
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scenario is assumed to be for-sale units that would be purchased by
APCHA qualified buyers, prioritizing Category 3 two-bedroom units,
where feasible and appropriate. When determining the value of a
Housing Credit, it was assumed the price would match the cash-in-
lieu amount for each category credit. Land and sale costs for each
property were calculated using recent sale data for comparable
nearby properties. Per square foot construction. Construction cost per
square foot were calculated using input from staff.
Residential Multi-Family (RMF)
For this zone district, the scenario assumes a lot size of 7,200sq ft,
with an allowable floor area of 9,000 sq ft, which is the middle-range
density permitted in this zone district. This model assumed 15 new
two- bedroom units, generating credits for 33.75 FTEs. It is important
to note that based on this lot size a developer would not be able to
include any additional units to get to the higher floor area because the existing parking requirements could
not likely be accommodated on the site. Figure 2 illustrates that as a
baseline, this lot type would have a Return on Investment (ROI) of
negative -51%, meaning it is not financially feasible to develop these
units through the credits program, and it is likely a property owner
would complete normal maintenance only.
Affordable Housing Planned Development (AH-PD)
For this zone district, the scenario assumes a lot size of 51,400 sq ft,
with an allowable floor area of 30,840 sq ft. This model assumed a
developer would try to maximize the potential floor area and would
develop 43 two-bedroom units, generating credits for 96.75 FTEs.
Figure 2 illustrates that as a baseline, this lot type would have a
Return on Investment (ROI) of negative -31%, meaning it is not
financially feasible to develop these units through the credits program,
and it is highly likely that a property owner would need to partner with
another organization to make the project pencil or would simply
complete normal maintenance to keep existing units in decent
condition.
Moderate-Density Residential (R-15)
For this zone district, the scenario assumes a smaller lot at 6,000 sq
ft, with an allowable floor area of 3,600 sq ft. Under current zoning, up
to four units could be built on this lot, generating credits for 9 FTEs.
Figure 3 illustrates that as a baseline, this lot type would have a
Return on Investment (ROI) of negative -40%, meaning it is not
financially feasible to develop the maximum four units through the
credits program, and it is highly likely that a property owner would
develop a free-market home.
Figure 2: AH-PD Baseline Analysis
Figure 3: R-15 Baseline Analysis
Figure 1: RMF Baseline Analysis
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Credits Program Adjustment Analysis
Given the fact that none of the financial modeling could yield a profitable affordable housing project, Design
Workshop completed an analysis of potential program adjustments using the same project scenarios.
There were no changes to the anticipated floor area or unit counts. Using ideas from interviewees as well
as staff, the following adjustments were analyzed:
• Issuing Credits for RO Units
• Allowing Credits for APCHA Category Housing Units that are Vacated
• Issuing Credits for Projects Outside of Aspen
• Allowing Credits for Dormitory Projects
• Direct Subsidies to Credits Projects
Issuing Credits to RO Projects
This adjustment would enable the creation of housing credits from projects that include Resident Occupied
(RO) housing units. Because there is no cash-in-lieu amount established for RO units, the models assumed
a value of $200,000 per RO FTE (full-time equivalent).1 While this program change alone does not create a
profitable project, it does have some potential as a viable adjustment in the AH-PD zone when coupled with
other program changes.
Program Adjustment Performance - RMF
For the RMF zone district, the analysis assumed 15 RO units, and yielded an ROI of negative -35%. While
this is an improvement from the baseline scenario, it is not enough on its own to make a project financially
viable.
Program Adjustment Performance – AH-PD
For the AH-PD zone district, the analysis assumed all 43 units would be at an RO level, and yielded an ROI
of negative -7%. This was an improvement from the baseline scenario, and indicates a potential for this
program adjustment to work in partnership with other changes.
Program Adjustment Performance – R-15
For the R-15 zone district, the analysis assumed all RO units, and yielded an ROI of negative -20%. This
was an improvement from the baseline scenario, but the monetary loss remains significant enough that a
developer would not likely move forward with the project.
Allowing Credits for Housing Units that are Vacated
This program change would provide housing credits for both the construction of an affordable housing unit,
as well as credits to account for cases in which new residents are leaving an existing housing APCHA
Category unit either to move to a smaller or different housing unit (for instance, downsizing from a three-
bedroom to a one-bedroom) or to a free-market unit. To make this financial model work, the credit is given
to a developer who is able to have an existing APCHA owner or renter move into a new unit. Another option
for this program change would be to provide that financial incentive to the individual homeowner, but that is
not possible to model within the scenarios.
1 The value of a credit is pegged to the cash-in-lieu rate for each category. The cash-in-lieu rate goes down the
higher the category. The Category 5 cash-in-lieu rate is $271582, so $200,000 was chosen because it is lower. Even
if the current Category 5 rate was used, this scenario has a negative ROI of -36% for RMF, a 1% ROI for AH-PD,
and negative -13% ROI for R-15.
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Program Adjustment Performance - RMF
The model tested the construction of 15 Category 5 units. Under this scenario a developer would receive
credits for the 15 units constructed, as well as credits for the units that were vacated by future residents.
The model assumed that all residents were living in Category 3 housing, meaning that a developer would
also receive credits equal to the 15 units vacated. When this program change is implemented, in the RMF
zone district the ROI is negative -6%, a significant increase from the baseline ROI, but still not a profitable
project.
Program Adjustment Performance – AH-PD
The model tested the construction of 43 Category 5 units. Under this scenario a developer would receive
credits for the 43 units constructed, as well as credits for the units that were vacated by future residents.
The model assumed that all residents were living in Category 3 housing, meaning that a developer would
also receive credits equal to the 43 units vacated. When this program change is implemented, in the AH-
PD zone district the ROI is 34%, resulting in a significantly profitable project that a developer would be
likely to pursue.
Program Adjustment Performance – R-15
The model tested the construction of 4 Category 5 units. Under this scenario a developer would receive
credits for the 4 units constructed, as well as credits for the units that were vacated by future residents. The
model assumed that all residents were living in Category 3 housing, meaning that a developer would also
receive credits equal to the 4 units vacated. When this program change is implemented, in the R-15 zone
district the ROI is 15%, resulting in a profitable project that a developer would be likely to pursue.
Issuing Credits for Projects Outside of Aspen
This program change would allow affordable housing projects located outside of the City of Aspen limits to
be eligible for a housing credit. For the purposes of this analysis, the scenario was limited to properties
located within the Aspen School District boundary. To determine the feasibility of this option, Design
Workshop reviewed property transaction information for areas in the district boundary. Given the high sales
prices for most locations, it was determined that this analysis should focus on the Town of Snowmass
Village, which has a slightly lower sale price per square foot than Aspen. In order to provide an apples to
apples comparison, the same zone district assumptions were used. Based on the analysis, this program
adjustment alone would not create a financially viable project in any scenario.
Cost information
Because the overall development and land costs are similar in Aspen and Snowmass village, these
scenarios resulted in an ROI that was only slightly more positive than the tested baseline scenarios, and
does not result in a financially feasible project.2
Allowing Credits for Dormitory Projects
As mentioned above, the current program does not allow credits for dormitory units, but there are
employers who are interested in developing these units for their employees. Design Workshop analyzed
how a dormitory project might work in each of the zoning scenarios. Dormitory units are required to be 300
sq ft per employee with some common spaces for amenities like kitchens, dining or living rooms, laundry,
2 RMF Baseline and Outside Aspen is negative -51%
AH-PD Baseline is negative -31% and Outside Aspen is negative -29%
R-15 Baseline is negative -40% and Outside Aspen is negative -39%
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and the like. For this analysis, the overall floor area limitation was maintained and the maximum number of
dorm units possible in that floor area was assumed. It was also assumed that these units would be for rent,
as it is most likely that an employer would develop these for their employees rather than for the general
community.
This program option is the only one that will create a financial
profit on its own in the RMF and AH-PD zone districts, though
the level of profitability depends on the Category of the
dormitory units. The financial feasibility of these program
changes result from being able to gain rental income as well as
income from the sale of the credit. It would need to be coupled
with other program changes in the R-15 zones to be financially
viable in those areas of the community.
Program Adjustment Performance - RMF
For the RMF zone district, the analysis assumes 41 dormitory
units. Under this scenario, the ROI is negative -7% for all
Category 3 units. However, when there is a mix of Category 4
and 3 units, the ROI increases to 6%, shown in Figure 4. This
potential program change is a significant increase in financial
viability from the baseline scenario.
Program Adjustment Performance – AH-PD
For the AH-PD zone district, the analysis assumes 100
dormitory units at Category 3, which does not maximize the
floor area on the site. Including 140 dorm units would maximize
the available floor area.
At 100 units, the ROI is 42% and at 140 units the ROI is 45% (at
Category 3). Moving to Category 2 units would also create
financially feasible projects at 100 or 140 dormitory units.
Category 1 is not financially viable even at 140 dormitory units.
The overall financial performance for 100 dormitory units at
Category 2 is shown in Figure 5.
Program Adjustment Performance – R-15
Given the zoning limitations in R-15 for 4 units, this limited
number of dorm units was included in the scenario analysis.
This yields a negative -12% ROI at the Category 3 level.
Figure 4: RMF Dormitory Scenario
Figure 5: AH-PD Dormitory Scenario
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Given that it is highly unlikely that a developer would build only 4
dormitory units, additional scenarios were tested to identify the
density required to make this scenario financially viable. At 6
units, the project has an ROI of 8% at Category 3, which is
illustrated in Figure 6. For Category 2 units, 8 units would be
required to gain a positive ROI (3%).
Direct Subsidies to Credits Projects
The final stand-alone scenario that was analyzed is the city
providing a direct development subsidy to a housing credit
developer. This assumed the same number of units as the
baseline scenario, which a fractional subsidy for each unit. This
program adjustment would require use of the city’s 150 fund or
other dedicated revenues for housing.
In order to complete the analysis, some assumptions about the
subsidy amount were made based on the unit type – the larger
the unit, the higher the assumed per unit subsidy. These
assumptions are illustrated in Figure 7. The level of subsidy
chosen was meant to assist in correcting the financial deficit
caused by the imbalance between per square foot construction
costs and APCHA sale costs. Levels of subsidy per bedroom
were increased by approximately $50,000 for every 200 square
feet of floor area added.
Program Adjustment Performance – RMF
As a baseline, the 15 Category 3 units in RMF would have a
Return on Investment (ROI) of negative -51%. With a subsidy of
$250,000 per unit, the ROI is better but still negative -39%.
Program Adjustment Performance – AH-PD
As a baseline, the 43 Category 3 units in RMF would have a Return on Investment (ROI) of negative -31%.
With a subsidy of $250,000 per unit, the ROI is better but still negative -13%.
Program Adjustment Performance – R-15
As a baseline, the 4 Category 3 units in R-15 would have a Return on Investment (ROI) of negative -40%.
With a subsidy of $250,000 per unit, the ROI is better but still negative -25%.
Program Adjustment Performance Compared to Buy-Downs
While the financial feasibility of the baseline scenarios is not profitable with the direct subsidy alone, the
amount of subsidy for these projects is less than a full buy-down in the upper valley. In a previous analysis
as part of the moratorium, Design Workshop analyzed the financial impact of using city funds for buy downs
in Aspen and down valley with the previously collected mitigation cash-in-lieu of $3,939,000. Based on that
analysis, the buy-down and deed restriction of 3 one-bedroom units in Aspen or 3 two-bedroom units in
Snowmass Village. These resulted in housing for fewer employees than if a subsidy to a developer is
utilized.
Figure 6: R-15 Dormitory Scenario
Figure 7: Assumed Direct Subsidy Amount
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To compare the ability of funds to generate affordable housing through unit buy-downs versus direct
development subsidies, an analysis was performed to quantify the level of subsidy required to enable a
profitable project (the target of 10% IRR was used). This analysis examined how many units of affordable
housing $3,939,000 collected from previous in-lieu-fees could create, either through buy down-downs or
developer subsidization.
Using the RMF development scenario that tested a single-family home’s redevelopment into four Category
3 2-bedroom units of affordable housing, a subsidy level of $850,000 per unit was required to yield a project
that reached 10% IRR. Using this threshold of subsidy, the $3,939,000 in funds could be used to create
approximately 4.6 2-bedroom units of housing, slightly more housing than if the funds were used for a buy-
down. It should be noted that the extent to which financial subsidy is required to yield a profitable project
will depend in large part on the cost of land and category and type of units developed.
Guaranteeing the Value of Affordable Housing Credits
The issue of Affordable Housing Credits not having a guaranteed value presents challenges in borrowing
against them to fund the construction of a project. As a result of how the affordable housing credits program
is currently operating, with credits being sold at the completion of a project at market value, financial
institution are unable to recognize them as a guaranteed form of collateral against a construction loan. To
provide financial institutions with assurance as to the value of housing credits, the City of Aspen should
explore providing a minimum guaranteed value of credits.
Two potential avenues that the City of Aspen could explore in order to provide a minimum guaranteed
value for housing credits is leveraging a portion of the 150 Fund or through revenue generated through a
bonding mechanism. The logistics of guaranteeing the value of housing credits would likely require that the
city take a more active role in the program, potentially becoming a clearing housing of sorts in which the
city would purchase and sell credits at a set value. It is recommended that the city further explore how the
150 Fund or bond revenues could be used to guarantee the value of housing credits, and the regulatory
and/or legal implications that such a guarantee could have.
Credits Program Adjustment Combinations
While some of the potential program adjustments provide a potential path to effectively increase the
utilization of the Affordable Housing Credits Program, the combination of adjustments is likely to be most
effective in creating broader interest and effectiveness of the program. Design Workshop explored different
combinations of program adjustments to understand how the layer of changes impacts the financial
feasibility of the program. Once again, the baseline scenarios were utilized in terms of potential unit counts
and floor area.
Combination 1: Credits Outside of Aspen with Direct Subsidy
This combination explores the use of a direct subsidy with a credits project developed outside of Aspen.
Because the difference in land value between the outside of Aspen option and land in Aspen is negligible,
combining that with a direct subsidy did not result in a financially feasible project for any scenario. Given
this reality, allowing the creation of Aspen affordable housing credits in other communities does not seem
to be a worthwhile program change to pursue.
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Combination 2: RO Housing Credits with Direct Subsidy
This combination explores the issuance of credits for RO units with a subsidy of $250,000 per two-bedroom
unit. The combination of these program changes does not result in a financially viable project in the RMF
(negative -22%) or R-15 (negative -5%) scenarios, but it does create a positive ROI in the AH-PD example
of 11%. This is a result of the higher unit count that is possible on the AH-PD example property, indicating
that a project in RMF that utilized a higher density than the baseline scenario could also potentially be
financially feasible. Given the potential feasibility of these options in some circumstances, there is value in
exploring these program adjustments.
Combination 3: RO Housing Credit with Unit Vacation Credit
This combination yields some potential. In the RMF scenario, the ROI increases to 15%. For AH-PD, the
ROI increases to 47%, indicating that with this combination a slightly lower density than the baseline could
still result in a feasible project. For the R-15 scenario, the ROI increases to 27%. This combination appears
to be quite successful and could be appealing to certain housing developers while providing housing for a
portion of the community who may qualify at RO levels now but purchased a Category unit earlier in their
careers. This type of adjustment will not necessarily appeal to all developers, but could provide one tool in
the housing toolbox to create more movement within the overall system.
Implementation
It is clear that some adjustments to the housing credits program are needed in order to make it more
effective as an option for developers. The interviews with local employers, as well as some feedback in the
moratorium process, indicate an interest in using the program to help create affordable housing in the
community – it just needs to make financial sense for the developer. Based on the analysis, from a financial
perspective all program adjustments, except allowing credits outside of city limits, would be worthwhile and
could provide additional opportunity for the private or non-profit sector to create housing in the community.
Specifically, the analysis indicates potential for the following program adjustments to result in more
affordable housing in the community:
• Allowing Credits for Dormitory Projects
• Issuing Credits for RO Units
• Allowing Credits for APCHA Category Housing Units that are Vacated
• Direct Subsidies to Credits Projects
• Removing the Limitation on Non-Profits from Participating
• Provide Information About the Program
Priority Program Improvements
The main program improvements that would effectively improve the financial feasibility of the program are
allowing credits for all housing units, regardless of deed restriction type and unit type. These should be
considered priorities to make a meaningful impact on the successfulness of the program.
As demonstrated in the financial modeling, the ability to create dormitory units and receive credits for
those projects is the most successful from a financial perspective. These unit types are also highly desired
by some of Aspen’s employers. This program adjustment, allowing credits for all housing unit types, is
included as potentially the most influential adjustment to the program.
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It is important to note that not all developers want to develop dormitory units, so other priority adjustments
should be pursued. Allowing credits for RO units provides a potential avenue for existing APCHA
homeowners to move through in the system. Providing some financial incentive for RO units, in addition to
Category units, could provide additional options for housing developers to make a project pencil. Potential
guardrails could be included, such as requiring a mix of Category units and RO units, similar to the current
GMQS 60% and 70% processes. It should be noted, however, that each project is unique and a specific
requirement for unit mix is not recommended at this time.
Other Program Improvements
While it may not be possible for all developments, the possibility of providing credits for existing APCHA
units that are vacated by an owner provides a potentially powerful tool. It could encourage more
movement within the existing inventory, and it provides a successful financial input to projects. This would
not necessarily be a standard item that all housing developers could use, but it is one option that could
make certain projects feasible.
Similarly, the use of direct subsidies is a potential option that could provide assist some projects. Rather
than allowing this for all projects, creating some parameters for when the city would provide a subsidy
should be discussed. This could be to support public private partnerships, or to support non-profits looking
to create housing on their land. It could also be used as a way to back the credits, rather than providing the
subsidy to the developer. It could provide some comfort to a financial institution, enabling a housing
developer to have access to a broader range of capital to pursue the project.
Policy / Information Improvements
When it comes to the ability for non-profits to utilize the credits program, the code language is relatively
unclear. What constitutes a non-profit receiving public funds for housing? If a non-profit entirely unrelated to
the housing realm receives a state grant that will help them provide housing, does that disqualify them from
the program? What about a taxing district like the hospital? The current code limitation seems to require the
city to understand forensic accounting practices to determine compliance. In place of that, the de facto
policy has leaned toward not allowing any non-profits to participate. One important program improvement is
to remove the limitation on non-profits / non-governmental organizations from participating in the
program entirely. These institutions, like private employers, are increasingly needing to provide housing for
their staff, and removal of the limitations would provide an additional funding source for these organizations
who may have available land to create housing that provides benefits to their workers and the community.
Some of the feedback in the interviews revealed a lack of understanding on how the housing credits
program works. A key recommendation that would not require any program adjustments is for the city to
provide clearer information, particularly to non-profits and employers about how the program works.
Similarly, providing clearer information or a training to financial institutions could be useful in expanding the
overall understanding of the program.
119 South Spring Street, Ste. 102
Aspen CO. 81611
December 05, 2022
RE: AFFORDABLE HOUSING CREDITS PROGRAM POLICY OBJECTIVES MEMO
Dear Ben and Phillip:
This letter is intended to capture much of the AH Credits discussion we have had over the past few years
as well as respond specifically to the Policy Objectives you lay out in your memo dated December 5, 2022.
I appreciate the opportunity to submit this letter along with the packet on the matter to City Council.
As I have described to you over the years as a private sector affordable housing developer, I believe the
concept of the AH Credits program is a solid foundation for the private sector’s participation in creating
affordable housing. That said, the program currently comes with inadequacies that limit the private sector
from creating any sizable impact on the delivery of new units. In effect, most Credits projects just keep up
with employee generation from free-market development and do not get out ahead of the affordable
housing shortfall. A robust restructuring of the AH Credits program could overcome the challenges that
keeps the private, non-profit, and quasi-governmental sectors from helping to get out ahead of our
community’s housing challenges.
As a result of the recent explosion of residential real estate values in the upper Roaring Fork Valley, the
entire dynamic and function of our longstanding affordable housing ecosystem has drastically changed
from its original intent and will likely never go back. No longer can households of deed restricted units
move on to the free market while remaining in the geographic reach of the Aspen community. Anecdotally,
and I believe could be supported by real evidence, households that are leaving their category ownership
units are not just leaving the Aspen area or upper valley but are exiting the Roaring Fork Valley entirely.
As you note in your memo, there are numerous barriers keeping a broader set of participants from utilizing
the Credits program for developing new affordable housing projects or acquiring and deed restricting
existing units. In addition, I believe the dramatic change in the housing market over the past few years
opens up some new (or old) considerations relating the affordable housing ecosystem in general and the
retooling of the Credits program specifically.
The following are the key areas that I find need attention in the AH Credits program update conversation,
most of which would benefit from being brought into policy in tandem rather than independent from each
other.
1.Align with financial fundamentals to make a business case
As you correctly identify in your memo, investors, banks and other financial institutions do not place
any value on Credits and therefore, are not able to underwrite them into the valuation of a project. If
the City was able to guarantee or even purchase the Credits and serve as a broker or clearinghouse,
this certainty of value could then be brought into the underwriting of a project. Of course, this
approach would run counter to letting the market determine the value of Credits, but over time it
would be cost neutral to the City as it would eventually sell the credits to developers needing to
mitigate employee generation. This backstopping of the Credits value would attract more participants
into the AH Credits program and certainly allow for larger projects, whether new development or
Exhibit B
2
development neutral. Aligning the program with more sound business, investment and lending
fundamentals would greatly reduce this critical barrier to entry.
2. Expand the geographic footprint of AH Credit project eligibility
Also addressed in your memo is the limited geographic opportunity for developing or buying down
affordable units within the Urban Growth Boundary. Even with consideration for the new policy to
allow affordable housing projects across a wider range of City zone districts, very few opportunities
still exist to get more than a few units here or there. And with the most recent explosion of residential
real estate throughout the upper valley, classic location theory still applies, and property is more
expensive near the center, in this case Aspen, than locations radiating outwards.
Finding creative policy solutions that allow the creation of AH Credits through the development or
buydown of units outside of the UGB may prove fruitful in the effort to get out ahead of our employee
housing crisis rather than just trying to keep up. And I agree with your suggestion in the memo that
the school district boundary is a good starting point for discussing what overlay captures the
geographic footprint that constitutes our local community and workforce. This exploration may even
spur some dialogue with our jurisdictional neighbors that could be the beginning of a more aligned
thinking on housing strategy.
3. Right-sizing and housing mobility
Perhaps the most impactful result of the recent residential real estate boom on the affordable housing
program is the inability for households to move out of the system and remain a part of the community
and the local workforce. Through the housing program’s tenure, many individuals and households
found their footing in the community by owning a deed restricted home through the housing program.
Then they could eventually find their way into a free-market ownership situation and solidify their
place in the community, whether in Aspen, Pitkin County, Snowmass or Woody Creek. Those days no
longer exist. In fact, the current disparity between category ownership units and free market is so
great that current affordable housing owners are effectively stuck, they either stay in their unit forever
or leave the community entirely.
To unlock this “stuckness”, a key consideration in the AH Credits discussion is reopening the
willingness to look at upper category and Resident Occupied units as critical path solutions to
balancing our housing ecosystem. Creating a pathway for moving households through the system
achieves two paramount tenets to the housing program: 1) new individuals and households have the
opportunity to own and live in a unit appropriately priced to their income level; and 2) the program
moves households through the system yet retains them as permanent members of the community. A
win-win outcome.
The impediment to the fluidity of the housing ecosystem is mobility. Some communities refer to it as
the missing middle, or workforce housing. In our community it can take on whatever is the most
appropriate term, but in function, it is the missing housing stock for households that are now earning
far more than their categorical deed restriction intends. My guess is that it’s hundreds of households
paying a much lower ratio of mortgage to gross household income compared to the standard rule of
thumb of 33%. These are critical members of the community and professional contributors to the
workforce that have nowhere else to go.
As a solution, I strongly encourage the consideration for expanding the support of upper income level
and RO housing. And in doing so, perhaps redefining Resident Occupied housing in order to bring
these unit types into the AH Credits program. For the purposes of an example, the creation of a new
3
RO unit in the UGB, upper valley or Snowmass secures a household from leaving our community and
workforce. And to double down, if that household moves out of a deed restricted ownership unit, well
then, the program not only retained a community household, but it opened up a unit for a new, likely
younger and more aligned individual or household for that unit, giving them a chance to become a
permanent member of the community. Hence the term, mobility.
If the AH Credits program focused on upward mobility as well as lower category and employer-owned
housing units, the workforce housing system could proliferate into accommodating households that
can afford significantly more expensive residences that they otherwise can no longer find in the
geographic boundary of our upper valley community. And in doing so, vacating a unit for a new
household.
This concept will likely be misconstrued as “double-dipping”. And for that reason, I’d like to reiterate
my prior points. We as a community are desperate for overcoming two challenges that have been
exacerbated by the recent real estate explosion: losing critical members of our community and
attracting and retaining newcomers to our community and workforce. To overcome these challenges,
we should look at a new strategy to the AH Credits program in the names of rightsizing and mobility.
Create policies to move households through the system, meaning right-sizing opportunities for
families to move into larger and more expensive units that they otherwise can no longer find in our
market. And incentivize that mobility through the Credits program by acknowledging their movement
is effectively the creation of two new units of ownership.
In this case, the math is simple: 1 + 0 = 2
4. Credits as regional housing currency
If these concepts can be perfected, and certainly with plenty of additions and omissions from others,
the AH Credits program could become a common currency for affordable housing mitigation across
our much wider region. Imagine an adjustable unit of affordability, a credit, that is transferable across
interrelated jurisdictions that are all part of the same regional workforce ecosystem. Radiating from
Aspen and the upper valley, this concept could expand down valley and throughout our broader but
interconnected regional community. True innovation, just as our novel housing program was at its
initial conception decades ago.
Bold concepts need to start at the epicenter of the challenge, and that is us. Our community faces the
greatest disparity of income inequality and real estate values across all mountain resort communities.
Learning from the success of our past visionary efforts and approaching our current crisis through an
eyes-wide-open approach gives Aspen the vision and perspective to crack the code and set the
standard once again for addressing mountain-community housing challenges.
I would very much be honored to continue to be part of this conversation in seeking solutions to these
unprecedented challenges.
Sincerely,
Adam C. Roy
Page 1 of 4
MEMORANDUM
TO: Aspen City Council
FROM: Megan Monaghan and Nancy Nichols Co-Managers, Kids First
THRU: Sara Ott, City Manager,
Diane Foster, Assistant City Manager
Scott Miller, Assistant City Manager
MEETING DATE: December 12, 2022
RE: Rent Relief Subsidy Waiver Program for Yellow Brick
Childcare Tenants
______________________________________________________________________
PURPOSE:
The purpose of this memo is to describe a rent relief program for the childcare providers
at the Yellow Brick building 215 N. Garmisch. This rent relief program will provide much
needed funds that will be used by each program to increase staff supports, recruitment
and retention. Kids First staff is seeking Council direction on the length of the rent relief
program with recommendation of 1 to 3 years.
SUMMARY & BACKGROUND:
Yellow Brick Building Rent - Staff is recommending that rent relief waiver will be
provided through a pilot program, that will allow the Yellow Brick Childcare tenants to
retain rent payments. Programs will still be expected to pay for utilities and be mindful
users of resources such as water, gas, electricity, and trash services. Programs will be
asked to demonstrate how the rent money retained will be used to create staff supports,
recruitment and retention. The city currently pays for all major capital improvements in
the building and subsidizes the operations and maintenance; this will increase this
benefit to childcare tenants substantially.
• City Council would consider an optional one, two, or three-year pilot program for rent
relief waiver at the Yellow Brick Building. Council would then like more information
about how the childcare lease holders would use the savings to support all staff.
Page 2 of 4
Current Yellow Brick Lease Information:
Program Current signed
lease and term
Leased Space Lease
includes
Rent
Monthly
rounded
up
Comments
ELC Lease through Aug
2023
13 classrooms, 1 office and
storage
Annual rent calculations
7559 sq ft @ $11.007 $83,201.91
and storage @ $2,448
Yes,
monthly
$6.934.00
$204.00
ELC will be given
an option for a
3-year extended
lease
AMT Lease through Aug
2023
1 classroom, 1 office and storage
Annual rent calculations
972 sq ft @ $11.007 $10,698.804
and storage @ 940.00
Yes,
monthly
$893.00
$79.00
Lease Sept 2023
through Aug 2026
972 sq ft classroom and office
increased 3%
Yes,
monthly
with
3%
increase
yearly
Secured space
through Aug 2026
AJAX
CUBS
Jan 2023 thru Dec
2023
4 classrooms, 1 office/storage
Annual rent calculations
3287 sq ft @ $11.34 $37,274.58
and storage @2,784.00
Yes,
monthly
$3,107.00
$232.00
Option for lease
extension for 2024,
2025
3287 sq ft classrooms and
office/storage increased 3%
Yes,
monthly
with a 3%
increase
yearly
Space option
through 2025
DISCUSSION:
Yellow Brick Building Rent Subsidy
Kids First Advisory Board and staff recommend that Yellow Brick childcare lease
holders rent costs are fully subsidized through an optional rent relief waiver program.
Page 3 of 4
This program would be offered as a pilot program beginning in January 2023. Childcare
programs will still be expected to pay for utilities and be mindful users of resources such
as water, gas, electricity, and trash services. Kids First staff will work with the programs
to approve a plan that demonstrates how the money saved in rent will be used to
increase staff supports, recruitment and retention.
A rent relief waiver program will support the Yellow Brick Childcare tenants financially
by allowing the childcare programs to retain rent money. These retained funds will be
used for additional supports for the childcare employees. Currently childcare programs
are not able to offer needed benefits to the employees and to retain and recruit
childcare staff. Examples of benefits that a program might consider include: health
benefits including vision and dental, additional time off, shorter workdays, longer breaks
from classroom time, additional mental health supports, time for classroom planning,
professional development, support for self-directed learning, retirement funds, or health
and wellness funds, an additional float teacher etc.
Program Proposal details
WHAT: Optional 1-to-3-year pilot rent relief waiver program,
WHO: Licensed childcare programs who lease space in the Yellow Brick Building
WHEN: Beginning January 1st, 2023
HOW: Childcare program directors will meet with Kids First staff and share work plans,
program information and financial records, on a quarterly basis. During budget work
sessions in 2023 – planning for 2024, Kids First staff will deliver City Council feedback
on program results to date.
*Application: Participants will complete an application requesting rent relief waiver for
a 1-year period of time reflecting the annual rent amount in lease.
*Agreement: Qualified participants will be required to meet with and complete a rent
relief waiver agreement with Kids First staff.
*Requirements: Applicants will use rent relief waiver funds exclusively to increase
supports for childcare staff.
#1 An approved written plan that includes how rent relief waiver funds will be used.
Including – decision points, benefits to staff and funding amount.
#2 A written report quarterly reporting on success and failures. Including feedback from
staff to support the funding and the amounts. Retention and recruitment numbers for the
quarter.
#3 Accounting of funds balance sheet including invoices and expected expenses.
Page 4 of 4
FINANCIAL IMPACTS: The Yellow Brick rent subsidy will be a reduction in revenues in
the Kids First operating budget.
ENVIRONMENTAL IMPACTS: N/A
POLICY QUESTIONS FOR CITY COUNCIL:
1. Yellow Brick Rent subsidy: Does City Council support the rent relief subsidy
program for the Early Childhood programs at the Yellow Brick, while still charging
proportionally for utilities and trash/recycling services?
2. Should this be an optional 1, 2 or 3- year pilot program?
RECOMMENDATIONS:
Staff recommends the above rent relief subsidy program for City Council approval.
Alternatives:
A. Childcare programs would not receive rent relief supports for retention and
recruitment of childcare program employees.
B. Childcare programs would need to find other funding support childcare staff at
the Yellow Brick building.
C. Childcare programs apply for 50% rent waiver
EXHIBITS: