Finance Committee Agenda and Packet 2020 12 15

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SUBJECT: FUND STRUCTURE & RESTRICTED REVENUE DATE: DECEMBER 15, 2020 PAGE 3 OF 6 of Historic Old Town Louisville, and authorized up to 20% of annual sales tax revenue to be spent for operating and maintaining the Louisville Museum Campus. Recreation Fund On November 8, 2016, Louisville voters approved a permanent sales tax increase of 0.15%, beginning January 1, 2018. Revenue from this increase is restricted for operating and maintaining the Louisville Recreation/Senior Center and pool facilities at Memory Square Park. The Recreation Fund was created to account for the receipt and expenditure of these funds and other funds necessary to operate the facilities. Capital Project Funds — Capital Project Funds are used to account for financial resources to be used for the acquisition, construction, or rehabilitation of capital assets. Capital Projects Fund The Capital Projects Fund was created in 1989 to account for monies received as a result of an additional one -percent (1%) sales tax that was effective July 1, 1989. The Capital Projects Fund finances various capital improvements throughout the City including street reconstruction, sidewalks, traffic improvements, facility improvements, etc. The Capital Projects Fund also accounts for salaries and benefits costs for staff allocated to capital projects. Impact Fee Fund The Impact Fee Fund was created in 2004 as a result of Ordinance 1436, Series 2003. This ordinance established various development impact fees impact fees to fund municipal facilities, parks and trails, recreation, and transportation improvements. The City is required to conduct an Impact Fee Study every five years. Impact Fee Studies were completed in 2006, 2011, and 2016. Please note that the Impact Fee Fund is classified as a Special Revenue Fund in the City's Comprehensive Annual Financial Report. In all other reporting for the City, including the budget documents, the Impact Fee Fund is classified as a Capital Project Fund. Debt Service Funds — Debt Service Funds are created to account for resources that will be accumulated and used to service general long-term debt. Recreation Debt Service Fund In 2016, the Louisville voters approved a $27,215,000 bond issue for upgrades to the Recreation/Senior Center and Memory Square Park. In addition, the voters approved an increase in the City's property tax levy not to exceed 3.350 mills to pay debt service on the bonds. The current mill levy has been certified at 2.750. The Recreation Debt Service Fund accounts for the resulting property tax revenue and the payment of principal and interest on the bonds. Permanent Funds — Permanent Funds are used to account for resources legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the government's programs (i.e., endowments). CITY COUNCIL COMMUNICATION 10