Impact Fee Liaison Committee Agenda and Packet 2016 12 06

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ILZ Cityof Louisville COLORADO • SINCE 1878 Finance Department 749 Main Street Louisville, CO 80027 Memorandum Date: December 6, 2016 To: Louisville Impact Fee Liaison Committee From: Kevin C. Watson, Finance Director Subject: Impact Fee Collections and Distributions Per request from the Louisville Impact Fee Liaison Committee, this memorandum reviews the City's methodology for recording the receipt and expenditure of Impact Fees. It also provides a history of the amount of Impact Fees collected and to what eligible projects they have been applied to. All Impact Fees are receipted into the City's Impact Fee Fund. Interest earned on the balance of the fund is credited to, and retained within, the fund. At the end of each year, the Finance Director and City Manager determine the expenditures that are eligible for reimbursement by Impact Fees. As one of the final transactions of the year, the Impact Fee Fund transfers amounts to the fund containing the costs deemed eligible for reimbursement. The revenue, expenditures, transfers, and resulting fund balance of the Impact Fee Fund are disclosed every year in the City's Comprehensive Annual Financial Report (CAFR) and Operating & Capital Budget document. However, these presentations are at the fund level. Since Impact Fee revenue, interest earning, and transfers are required to be accounted for by Impact Fee category, staff prepares a series of detailed workpapers that support the amounts reported in the CAFR and Budget document. The table on the following page (Exhibit A) summarizes the Impact Fee Fund revenue, expenditures, transfers, and fund balances by Impact Fee category for the years 2006 through 2016. For example, the fund balance at December 31, 2015 was $906,296. This can be broken down by Impact Fee category: Library ($241,398), Parks & Trails ($464,447), Recreation ($200,279), Municipal Facilities ($156), and Transportation ($17). For 2016 estimates (the last section on Exhibit A), note that the projected transfers from the Impact Fee Fund do not exceed the 2015 fund balances. This methodology for calculating the annual transfers has been used in the preparation of the biennial budgets and the long-term financial plans and is designed to give a conservative estimate of revenue available for spending. In other words, when developing the budget and financial plan, we only anticipate using Impact Fee revenue the year after the revenue is actually collected. The next table (Exhibit B) summarizes the costs eligible for reimbursement by year (2007-2015), Impact Fee category, and project description. Note that this table summarizes the eligible costs, not the amounts that were eventually transferred as reimbursements. The final table (Exhibit C) compares the eligible costs with the actual use of Impact Fee revenue. In most cases, the amount of eligible costs significantly exceeds the amounts of reimbursement. In some cases, the amount of eligible costs equals the amounts of reimbursement. In one case, the amount of eligible costs is lower than the amounts of reimbursement due to an adjustment of eligible cost after the reimbursement was made. This will be corrected by adjusting future reimbursements.