Colorado Legislative Council Staff
STATE and LOCAL
FISCAL NOTE
State General Fund Expenditure Impact
Cash Fund Exempt Revenue and Expenditure Impact
Local Revenue and Expenditure Impact
Drafting Number: Prime Sponsor(s): |
LLS 98-010 Rep. George |
Date: Bill Status: Fiscal Analyst: |
January 8, 1998 House Local Government Steve Tammeus (866-2756) |
TITLE: CONCERNING THE ESTABLISHMENT OF THE LOCAL GOVERNMENT GROWTH ASSISTANCE PROGRAM TO PROVIDE FINANCIAL ASSISTANCE TO GROWTH-IMPACTED LOCAL GOVERNMENTAL ENTITIES, AND MAKING AN APPROPRIATION IN CONNECTION THEREWITH.
Summary of Legislation
STATE FISCAL IMPACT SUMMARY |
FY 1998/99 |
FY 1999/2000 |
State Revenues General Fund Local Government Growth Assistance (LGGA) Fund |
$10,000,000 |
|
State Expenditures General Fund Transfer to LGGA Fund LGGA Fund - Grants and loans LGGA Fund - Local Affairs Administration Cash Fund Exempt - Department of Law |
$10,000,000 $9,949,360 $50,640 3,600* |
$46,220 $1,680* |
FTE Position Change |
1.0 FTE |
1.0 FTE |
Local Government Impact — Local governments that are qualified to participate in the program would be eligible to apply for grants and loans. |
*These amounts for the Department of Law are included in the LGGA Fund amount above.
This bill establishes a pilot program that allows local governments to cooperatively address the impacts of growth by utilizing financial assistance given by the state to growth-impacted regions.
The program is to be repealed July 1, 2004.
The bill defines “excess per capita revenue” as the difference between the per capita revenue within a growth county and per capita revenue statewide. A growth county is a county with a population of less than 35,000 in which the per capita revenue is greater than the per capita revenue statewide, and is at least ten percent greater than the per capita revenue of the participating subsidizing county with the lowest per capita revenue. A subsidizing county is a county in which the per capita revenue is at least ten percent less than the per capita revenue of the growth county with the highest per capita revenue that is a party to the intergovernmental agreement.
The bill allows any combination of governmental entities, where at least one entity is a growth county and one entity is a subsidizing county and at least once city or town located in each of said counties is a participant, to enter into an agreement for up to five years to implement a plan to relieve financial pressures and facilitate certain services to local governments affected by growth. The bill requires the agreement to be submitted to the Executive Director of the Department of Local Affairs (DOLA) for certification. The agreement shall establish a method for allocating moneys in a Local Growth Impact Fund to one or more of the affected entities that are a party to the agreement. The agreement shall also stipulate the treatment of any unexpended moneys in the fund for purposes of fiscal year spending limits as set forth in Section 20 of Article X of the State Constitution. The bill specifies that no such intergovernmental agreement shall be entered into after July 1, 1999.
The Executive Director of DOLA shall verify these agreements by October 1 of each year and notify the governing boards of the participating entities. The Executive Director shall also annually determine the amount of excess per capita revenue and the population of each growth county participating in the agreement. The bill authorizes the Executive Director to promulgate rules for the implementation and administration of the program.
The bill creates, within DOLA, the Local Government Growth Assistance Advisory Committee comprised of the executive directors of the departments of Local Affairs, Human Services, Transportation, and Revenue; the State Director of Housing; and four members appointed by the Executive Director of DOLA. The bill prescribes the terms and duties of the members.
The bill creates, in the State Treasury, the Local Government Growth Assistance Fund to be comprised of:
• all revenue appropriated to the fund by the General Assembly;
• all revenue received by the Executive Director of DOLA for the repayment of loans; and
• all interest derived from the investment of revenue in the fund.
All interest derived from investment of moneys in the fund shall be credited to the fund, and all unexpended moneys at the end of each fiscal year shall remain in the fund. The moneys in the fund shall be subject to annual appropriation to DOLA for the administration of the program and for awarding grants and making loans to parties of the approved agreements.
The bill allows the parties to an approved agreement to apply to the Executive Director of DOLA, no later than November 1 of each year, for a grant or loan from the fund. Upon receiving recommendations from the advisory committee, the Executive Director may award a grant or loan not to exceed an amount equal to the total of 50 percent of the product of the excess per capita revenue and the population of each growth county that is a party to the agreement. The bill requires the parties to the agreement to provide matching funds in the amount of the grant or loan. The total amount of grants and loans shall not exceed the amount of revenues in the Local Government Growth Assistance Fund.
When an agreement has been approved, the bill requires a board of trustees to be created to represent the parties in the agreement. The bill specifies the membership and duties of the board. The board is required to establish and manage a Local Growth Impact Fund which shall consist of grants, loans, and any other moneys credited to the fund pursuant to the agreement. Any moneys distributed from a local fund shall be treated as fiscal year spending by the entity that receives the moneys and make expenditures. The treatment of any moneys remaining in a local fund at the close of the state fiscal year shall be determined by the parties of the agreement. The bill specifies that moneys distributed from a local fund to a school district may be used only for capital construction and not for operating expenses.
The bill requires the Executive Director of DOLA to submit an annual report to the Governor and the House and Senate Local Government committees. The bill specifies the content of the report.
The bill appropriates $10 million from the General Fund to the Local Government Growth Assistance Fund for further appropriation to the Department of Local Affairs to implement the program during FY 1998-99.
The bill would take effect at 12:01 a.m. on the day following the expiration of the 90-day period after final adjournment of the General Assembly; or upon proclamation of the Governor if a referendum petition is filed against this act and approved by a vote of the people.
This bill will affect state General Fund expenditures, cash fund revenue, and cash fund expenditures. It will also affect local government revenue and expenditures. Therefore, the bill is assessed as having a fiscal impact.
State Expenditures
The bill requires the Department of Local Affairs to administer a grant and loan program valued at $10 million. The department will be required to perform the following activities:
• review and verify agreements by October 1 of each year and notify the governing boards of the participating entities;
• annually determine the amount of excess per capita revenue and the population of each growth county participating in the agreements;
• promulgate rules for the implementation and administration of the program;
• support the Local Government Growth Assistance Advisory Committee;
• conduct qualification reviews, review applications, award grants or loans, and administer funded grants and loans; and
• submit an annual report.
Table 1 provides a summary of the administrative expenditures the department will incur for FY 1998-99 and FY 1999-2000 to implement the provisions of the bill. This fiscal note assumes the amounts of the grants and loans will be equal to the amount of the moneys in the Local Government Growth Assistance Fund, less the department’s administrative costs.
Table 1 - Department of Local Affairs Local Government Growth Assistance Fund |
||
|
FY 1998-99 |
FY 1999-2000 |
Personal Services Admin Prog Spec II (grade 91/step 1) Pera/Medicare Total |
1.0 FTE - $35,892 4,648 $40,540 |
1.0 FTE - $35,892 4,648 $40,540 |
Operating and Meeting Expenses |
$4,000 |
$4,000 |
Legal Expenses Department of Law |
75 hours - $3,600 |
35 hours- $1,680 |
Non-recurring Expenses |
$2,500 |
0 |
Total Expenses |
$50,640 |
$46,220 |
Expenditures Not Included
Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:
• health and life insurance costs, $2,212;
• short-term disability costs, $75;
• inflationary cost factors;
• leased space; and
• indirect costs.
Local Government Impact
Local governments that are qualified to participate in the program would be eligible to apply for grants and loans which would require additional administrative expenses to negotiate the agreements, to administer any grants and loans, and to prepare annual reports. The bill does not specify whether these administrative costs must be absorbed or can be recovered as a cost to the grant or loan. This fiscal note assumes administrative costs must be absorbed based upon the provision that prohibits school districts from applying the funds to operating expenses. The bill also does not specify whether loans would be subject to an interest cost when repaid to the state fund. Additionally, some local governments (growth counties) may not receive direct monetary assistance through the program but could still incur administrative expenses.
Spending Authority
This fiscal note would imply that the Department of Local Affairs would require a General Fund appropriation of $10,000,000 for FY 1998-99 to the Local Government Growth Assistance Fund. Of this amount, the Department of Local Affairs would require a cash fund spending authority of 1.0 FTE and $10,000,000 and the Department of Law would require a cash fund exempt spending authority of $3,600.
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