Colorado s Energy Impact Program and DOLA s Role (What I m SUPPOSED to cover.) Energy AND Environment Symposium May 15, 2014 Presented by Reeves Brown, Executive Director Colorado Department of Local Affairs
(What I m GOING to cover.) When Government Works Best The Secret to Successful Communities Colorado s Energy Impact Program and DOLA s Role Energy Quiz: Are you smarter than a Freshman? 2
When Government Works Best 3
Good Government represents the diversity of our great state. 4
Good Government doesn t view public policy problems through a partisan lens. Democrat Pothole Republican Pothole Potholes is Potholes and they need to be fixed! 5
Government works best LOCALLY We inherently trust and have confidence in those with whom we are familiar. People KNOW their local officials and can hold those officials accountable. Local government is focused on community problems rather than political agendas. 6
Trust & Confidence in Local / State Government Source: Gallup annual governance poll
The Secret to Successful Communities 8
The Secret to Successful Communities Successful communities are more about: shared VISION & shared VALUES than shared zip codes. heart & soul than bricks & mortar. The most valuable asset that any community has is its PEOPLE, and their ability to collaborate on their shared vision and values. 9
Colorado s Energy Impact Program and DOLA s Role 10
What the heck is a DOLA? Created in 1967 after Commission Study MISSION: Strengthen Colorado communities and enhance livability Equitable & consistent implementation of property tax laws Safe affordable housing Community development that is revitalizing and sustainable Technical & financial support for community needs Unique among state governments nationwide Unique in Colorado state government
Technical Assistance 1. Strategic Planning/Capital Improvement/Infrastructure 2. Budget/Finance Management 3. Land Use/Environmental Planning 4. Economic Development 5. Personnel and Human Resource planning 6. Elections 7. Housing 8. Emergency Management 9. Property Tax 10. General Administration 11. Statutory Compliance
Financial Assistance: Energy and Mineral Impact Assistance Program The purpose of the Energy Impact Program is to assist political subdivisions socially and/or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels. 29 Road & Bridge Construction Mesa County
Two Sources of Energy Impact Funds 1. Federal Mineral Lease revenues a. Bonus Payments from lease auctions b. Royalties from production 2. Severance Tax revenues
Two Types of Energy Impact Fund Distributions 1. Direct Distribution (formulaic) a. Employee Residence b. Road Miles c. Population 2. Competitive Grants a. Energy Impact b. Demonstration of Need c. Local Effort / Match d. Readiness to Go
How Energy Impact Funds are distributed: FEDERAL MINERAL LEASE Revenues Total Federal Mineral Lease Collections 49% Bonus Receipts 49% Non-Bonus Receipts 51% U.S. Treasury 50% Local Govt Perm Fund 50% Higher Educ Reserv Fund 48.3% State Public School Fund 10% Colorado Water Conserv Board 1.7% Local School Dist Direct Distrib 40% Local Impact Distrib Program (spillover) (spillover) (spillover) 50% Local Gov DIRECT Dist 50% Local Gov GRANTS 16
How Energy Impact Funds are distributed: SEVERANCE TAX Revenues Total State Severance Taxes Collected 50% State Trust Fund (Department of Natural Resources) 50% Local Impact Fund (Department of Local Affairs) 50% Perpetual Base Account for CWCB loans 50% DNR Operational Account 30% DIRECT Distribution to Local Govts 70% COMPETITIVE GRANTS to Local Govts (Capped at $50m; remainder flows to CDPHE s Small Communities Water and Wastewater Grant Fund.) 17
Severance & Federal Mineral Lease Revenues to DOLA (2006-14)
DOLA Energy Impact GRANTS Awarded 2008-2014 (Grant funds diverted to help balance State Budget)
GRANT Project Types 2008-14
Location of Energy Impacts vs. Energy Impact Awards Severance Tax Receipts are Inherently Volatile
Three Things That Don t Exist 1. The Easter Bunny 2. The Tooth Fairy 3. The community that thinks they re getting their fair share of Energy Impact Funds
Three Factors that Affect Severance Tax Revenues 1. Amount of Production 2. Price of the Commodity 3. Property Tax Credit
Colorado Natural Gas Production 1995-2013 Source: CO Oil & Gas Cons Commission
Colorado Oil Production 1995-2013 Source: CO Oil & Gas Cons Commission
Gasoline Price Weekly US Gas Prices ($/gal) Source: US Energy Info Admin Colorado Weekly Rig Count Source: CO Oil & Gas Cons Commission
Property Tax Credit =???
Price X Production X Property Tax Credit = Unpredictable Severance Tax Revenues
DOLA s Goals in Managing Energy Impact Funds Get the money out the door. Serve communities equitably. Provide communities as much consistency/predictability as possible.
ENERGY QUIZ Are you smarter than a Freshman?
World Energy Consumption In 2011, the globe consumed the equivalent of 12,275 million tonnes of oil. Figures for the top 50 nations show how important fossil fuels remain; they supplied 87% of the world s energy. Interactive graphic: http://www.nature.com/news/interactive-global-energy-sources-7.7647?article=1.11909
Global Power Fleet by Technology NOTE: Circle size represents installed capacity (MW) Source: Power Plant data source Platts UDI Database, June 2012
The World at Night
Who in the World Uses What?? Argentina Australia Belgium Brazil Canada Chile Egypt Finland France Germany India Indonesia Iran Italy Japan Kuwait Mexico Netherlands Pakistan Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Taiwan Thailand Turkey United Arab Emirates United Kingdom United States Venezula
Argentina Australia Belgium Brazil Canada Chile Egypt Finland France Germany India Indonesia Iran Italy Japan Kuwait Mexico Netherlands Pakistan Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Taiwan Thailand Turkey United Arab Emirates United Kingdom United States Venezula Worldwide Coal Use Source: BP Statistical Review of World Energy 2012
Argentina Australia Belgium Brazil Canada Chile Egypt Finland France Germany India Indonesia Iran Italy Japan Kuwait Mexico Netherlands Pakistan Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Taiwan Thailand Turkey United Arab Emirates United Kingdom United States Venezula Worldwide Oil Use Source: BP Statistical Review of World Energy 2012
Worldwide Natural Gas Use Argentina Australia Belgium Brazil Canada Chile Egypt Finland France Germany India Indonesia Iran Italy Japan Kuwait Mexico Netherlands Pakistan Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Taiwan Thailand Turkey United Arab Emirates United Kingdom United States Venezula Source: BP Statistical Review of World Energy 2012
Worldwide Nuclear Use Argentina Australia Belgium Brazil Canada Chile Egypt Finland France Germany India Indonesia Iran Italy Japan Kuwait Mexico Netherlands Pakistan Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Taiwan Thailand Turkey United Arab Emirates United Kingdom United States Venezula Source: BP Statistical Review of World Energy 2012
Worldwide Hydro/ Renewable Use Argentina Australia Belgium Brazil Canada Chile Egypt Finland France Germany India Indonesia Iran Italy Japan Kuwait Mexico Netherlands Pakistan Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Taiwan Thailand Turkey United Arab Emirates United Kingdom United States Venezula Source: BP Statistical Review of World Energy 2012
Thank You! Colo Dept of Local Affairs Reeves Brown, Executive Director 303-864-7861 reeves.brown@state.co.us 40