Ordinance 2008-1539 - Laserfiche WebLink

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Attachment B -Revenue Sharing Methodologies The workgroup retained BBC Research and Consultting to help identify possible approaches to address the revenue stability problem. BBC met with each participating municipality, discussed with them their goals and objectives for the project, and helped the working group further identify possible approaches to address the revenue stability problems. Initially, BBC and the workgroup identified 11 revenue sharing methodologies, and then winnowed it down to five approaches that BEiC modeled. Determining the revenue to be shared Several sources of revenue to share were exploredl, including: sharing revenue based on incremental sales tax revenue growth, sharing the total base revenue available, sharing revenue from new development or redevelopment only. For municipalities that are at the front end of the growth curve, sharing incremental revenue is seen as inequitable because their growth from year to year is much greater than those communities who are nearing build-out and experiencing flat population growth. The new communities do not get the advantage of sharing the revenue of established regional retail from the mature communities, but still have to share revenue from their new regional retail. However, because the budgets of most mature municipalities are encumbered by dedicated or ear-marked sales tax revenues, bond payments, or other restrictions., they are prevented from sharing revenue beyond new tax growth. The restrictions on existing sales tax revenue led the workgroup away from modeling based on total revenue generation, although all agreed that some concession should be made for the position of a city/town on the front end of the growth curve. Only general fund allocated sales tax revenue was included in the base for sharing. This approach allows for revenue sharing only when a municipality experiences revenue growth; if revenue is flat or diminishes the city/town would riot share revenue for that year, but they would still be eligible to receive revenue from the sharing agreement based on the mechanism for sharing (i.e. population, spending power, etc.). While most of the methodologies were modeled using the incremental sales tax sharing approach, the final approach that the group arrived at included sharing revenues of new and redeveloped regional retail. Methodologies for Sharing Revenue The Revenue Stability Working Group retained BBC Research and Consulting to conduct in-depth analysis on potential methods of sales tax sharing. The working group reviewed ten revenue sharing methodologies, and selected five methods to focus on for the study: 1. Population 2. Spending Power 3. Leakage adjustment 4. Regional land bank S. Hybrid model -Population and spending power In the analysis, each method showed gains and losses for each community over time, with winners and losers in every scenario.