DEFICIT REDUCTION FEES

Distribution: General Fund 100%

Source: Contractors and developers

Collection: The Town developed a fiscal impact model in 1998 that calculates the financial effect of proposed new developments on the Town’s future operating budgets. The model looks at a 20-year projection of the revenues (e.g., property and sales tax) and the cost of services added by the proposed development (e.g., public safety, streets and parks maintenance). When there is a cumulative deficit for the 20-year period, a present value of the deficit is calculated. A development with a retail commercial component will have a lower or no deficit reduction fee depending on the retail versus residential mix. The fee is increased annually by inflation as measured by the Denver-Boulder Consumer Price Index (CPI). The deficit reduction fee is negotiated between the developer of a proposed new development and the Town during the annexation process. Once agreed upon, the fee becomes a part of the annexation contract. Trend

• Revenues fluctuate based on the amount of new development, level of annexation activity, and the Denver-Boulder CPI.