1 October 7, 2005 Henderson Young & Company Revenue Credits for Impact Fees October 7, 2005 Henderson, Young & Company graphics by Pacific Rim Resources

2 October 7, 2005 Henderson Young & Company Typical Approaches to Revenue Credits RationaleRevenue Credit Growth pays taxesCredit for all taxes Growth pays taxes,Credit for taxes some for capacity for capacity Everybody pays taxes,Credit for everybody’s some for capacity taxes for capacity Growth should pay forNo revenue credit 100% of impact

3 October 7, 2005 Henderson Young & Company Osceola County’s School Dilemma Rapid growth Declining capital revenue from state Growing backlog of deferred capital renovation and replacement Impact fee significantly below cost

4 October 7, 2005 Henderson Young & Company Osceola County’s School Solution Prioritize Expenditures “…first use and direct that … non-impact fee capital revenues be utilized to provide the district’s non-growth related needs such as renovation, remodeling, and replacement of its existing school facilities…” Seek Additional Revenue Referendum for 1/2¢ local option sales tax for school capital needs Update Impact Fee Calculate impact fee with and without local option sales tax.

5 October 7, 2005 Henderson Young & Company Osceola Schools Credit (with Sales Tax) Total Capital Revenue$ 230 Non-Capacity Capital Costs- 176 Revenue Available for Growth 54 Capacity Cost for Growth÷ 150 Revenue Credit= 36%

6 October 7, 2005 Henderson Young & Company Osceola Schools Credit (without Sales Tax) Total Capital Revenue$ 160 Non-Capacity Capital Costs- 176 Revenue Available for Growth-16 (= 0) Capacity Cost for Growth÷ 150 Revenue Credit= 0%

7 October 7, 2005 Henderson Young & Company Impact Fee Results With 1/2¢ Sales Tax $ 6,257 Without 1/2¢ Sales Tax 9,708

8 October 7, 2005 Henderson Young & Company Revenue Credit Variables 1. How are revenues used? 2. What basis for uses of revenue? 3. Who pays the revenues? 4. When are the revenues paid? 5. Are revenue payments treated alike? 6. Are credits given for prior payments? 7. Are credits given for debt service payments?

9 October 7, 2005 Henderson Young & Company 1. How are revenues used?  All purposes.  Only if used for capital.  Only for capital that adds capacity.  Only for capital that adds the same capacity as the impact fee.

10 October 7, 2005 Henderson Young & Company 2. What basis for uses of revenues?  Historical practices.  Future plans.  New policy.

11 October 7, 2005 Henderson Young & Company 3. Who pays the revenues?  Only new development.  All taxpayers.

12 October 7, 2005 Henderson Young & Company 4. When are the revenues paid?  Before the impact fee is adopted.  During the time horizon of the plan.  During the economic life of the new development.

13 October 7, 2005 Henderson Young & Company 5. Are revenue payments treated alike?  New development’s payments considered separately.  New development’s payments treated the same as everyone else.

14 October 7, 2005 Henderson Young & Company 6. Are credits given for prior payments?  All prior payments.  Prior payments if used for any capacity.  Prior payments if used for capacity that is available to serve development.

15 October 7, 2005 Henderson Young & Company 7. Are credits given for debt service payments?  All payments for debt service.  Debt service payments if used for any capacity.  Debt service payments if used for capacity that is available to serve development

16 October 7, 2005 Henderson Young & Company My Favorite Approaches 1. How used 2. Basis for use 3. Who pays 4. When paid 5. Treated alike 6. Prior payments 7. Debt payments Same capital as fee Future plans All taxpayers Plan time horizon Same as everyone If capacity available

17 October 7, 2005 Henderson Young & Company My Credit Methods Global Policy Per Unit 42% 33% 25%

18 October 7, 2005 Henderson Young & Company Factors in Selecting Credit Method 5. Availability of Data 1. Statutes & Case Law 2. Local Policies 3. Past and Present Practices 4. Specific Revenues Available

19 October 7, 2005 Henderson Young & Company Osceola Decision: Credits 1.School board’s priority policy how the money is spent is reasonable, not arbitrary. 2.School board decides whether method is global or per unit. 3.School board decides time horizon for calculations.

20 October 7, 2005 Henderson Young & Company End of Presentation