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HOW DOES THE CITY'S BUSINESS ASSISTANCE PROCESS WORK? _1 The City established a Business Assistance Program (BAP) in 2007. This program, developed by the City Council's Business Retention and Development Committee, is designed to encourage job and sales growth in the commu- nity. The general philosophy behind incentives is that they are provided to encourage new or expanding businesses to move to, or stay in, Louisville. Two important factors are: 1) they are not a reward for action already taken or a decision already made; 2) there is an underlying belief that without the incen- tive, the project would not occur and the resulting revenue gain and jobs would not come to the City (or existing retail and /or jobs might leave Louisville). All BAPs must be approved by the City Council. Details and conditions of each vary based on the type of project and anticipated revenue. All these incentives have "clawback" pro- visions. The business must pay back some or all of the incen- tives offered if they don't stay in operation for a specified time. BAPs include four types of incentives: Sales Tax Rebates — If a business is going to bring new retail sales to the community, the City may rebate back to the business a portion of the City's general sales taxes. The rebate doesn't apply to existing sales in the community if the business is already located in Louisville. Sales tax rebates are approved for a specific time period, not in perpetuity. Building Permit Fee Rebates — The City may rebate a portion of the building permit fees associated with a new building or remodel of an existing building to intent job creation or new retail sales. These fees are rebated only after the project has received a Certificate of Occupancy from the Building Division. Construction Use Tax Rebates — The City may rebate a portion of the construction use tax that is applied to the ma- terials used for new construction or remodels. (Also paid out after the project has received a Certificate of Occupancy.) Consumer Use Tax Rebates — Businesses need to buy items to operate (i.e. desks and chairs) which are subject to the consumer use tax if they purchase items from outside the community. The City may rebate a portion of these taxes. This program has been very successful in attracting new business and encouraging existing businesses to grow in Louisville. Since the program's inception, 41 agreements have been approved. These projects vary in size from Glacier Ice Cream & Gelato opening on South Boulder Road to Pearl Izumi constructing a new world headquarters in the Colo- rado Tech Center. Great projects, small and large, happen in Louisville in part due to this incentive program. The Business Assistance Program is a critical tool for Louisville to stay com- petitive with other municipalities in the state and region. 2013 BUDGET APPROVED _ The City Council held 2013 budget discussions in a series of four public meetings held in October and November culminating in the approval of the budget on November 5. The City is in good fiscal health as a result of several things including: (1) the voters approving the Use Tax in November 2010, (2) the current building activity generating an increase in building permit and building use tax revenue that is likely to continue for several more years, (3) Louisville being recog- nized as a great destination for food and fun and the resulting sales tax revenue generated by those activities, and (4) the 2009 and 2010 actions bringing expenditures and revenues back into balance with the loss of Sam's Club and Safeway. The City's strong fiscal health makes it possible to have a 2013 Budget and Five -Year Capital Improvements Plan that funds several large capital projects in the coming years. This increase in capital spending is the result of several years of building up reserves. Even with these projects we are still increasing funding for the City's street resurfacing program from the current level of $1.25 million to $1.5 million in 2015 and then $1.75 million in 2016 and 2017 to optimize the level of resurfacing and minimize the life -cycle costs of maintaining streets. As in past years, in 2013 we continue the policy of main- taining a General Fund reserve of at least 15% of current year expenditures. In fact, at the end of 2013, we expect to main- tain a General Fund reserve of about 25% of 2013 expendi- tures. We think this level of reserves in the General Fund is both adequate and prudent. The 2013 budget was based on goals established by the City Council. Some if which include: Maintaining Citizen Services • Economic Development • Restoring the Grain Elevator • Pedestrian /Bike Mobility • Focusing on Strategic Planning • Prioritizing Capital Projects • Cooperation with Regional Partners • Sustainability The complete 2013 budget will be available on the City's web site (www.LouisvilleCO.gov) shortly. Winter 2012 - 2013 3