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Colorado’s Energy Impact
Program and DOLA’s Role
Energy AND Environment Symposium
May 15, 2014
Presented by Reeves Brown, Executive Director
Colorado Department of Local Affairs
AND
(What I’m SUPPOSED to cover.)
(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.
5
Republican Pothole
Potholes is Potholes and they need to be fixed!
Democrat Pothole
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 revenuesa. 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
16
Total Federal Mineral Lease Collections
50%Local Gov
DIRECT
Dist
50%Local Gov
GRANTS
51%
U.S. Treasury
49%
Bonus
Receipts
49%
Non-Bonus Receipts
10%Colorado
Water
Conserv
Board
40%Local Impact
Distrib Program
1.7%Local
School
Dist
Direct
Distrib
10%Colorado
Water
Conserv
Board
1.7%Local
School
Dist
Direct
Distrib
10%Colorado
Water
Conserv
Board
48.3%State Public School
Fund
(spillover) (spillover) (spillover)
50%
Local
Govt
Perm
Fund
50%
Higher
Educ
Reserv
Fund
How Energy Impact Funds are distributed:
SEVERANCE TAX Revenues
17
Total State Severance Taxes Collected
50%
State Trust Fund(Department of Natural Resources)
50%
Local Impact Fund(Department of Local Affairs)
30%
DIRECT Distribution
to Local
Govts
70%
COMPETITIVE
GRANTS
to Local Govts
50%
Perpetual Base
Accountfor CWCB loans
50%
DNR
Operational
Account
(Capped at $50m; remainder
flows to CDPHE’s Small
Communities Water and
Wastewater Grant Fund.)
Severance & Federal Mineral Lease
Revenues to DOLA (2006-14)
DOLA Energy Impact GRANTS Awarded
2008-2014
(Grant funds
diverted to
help balance
State Budget)
GRANT
Project Types
2008-14
Severance Tax Receipts are Inherently VolatileLocation of Energy Impacts vs. Energy Impact Awards
Three Things That Don’t Exist
1. The Easter Bunny
2. The Tooth Fairy
3. The community that thinks
they’re getting their fair share
of Energy Impact Funds
Three Factors that Affect
Severance Tax Revenues
1. Amount of Production
2. Price of the Commodity
3. Property Tax Credit
Colorado Natural Gas Production
1995-2013
Source: CO Oil & Gas Cons Commission
Colorado Oil Production
1995-2013
Source: CO Oil & Gas Cons Commission
Source: CO Oil & Gas Cons Commission
Source: US Energy Info AdminWeekly US Gas Prices ($/gal)
Colorado Weekly Rig Count
Gasoline Price
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
Source: Power Plant data source Platts UDI Database, June 2012
NOTE: Circle size represents installed capacity (MW)
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
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
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 Natural Gas 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 Nuclear 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 Hydro/ Renewable 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
Thank You!
Colo Dept of Local Affairs
Reeves Brown, Executive Director
303-864-7861
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