HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/21/2000 - FIRST READING OF ORDINANCE NO. 173, 2000, CONTINUI AGENDA ITEM SUMMARY ITEM NUMBER: 20
DATE: November 21, 2000
FORT COLLINS CITY COUNCIL STAFF: Frank Bruno
Alan Krcmarik
SUBJECT:
First Reading of Ordinance No. 173,2000,Continuing a Temporary Manufacturing Equipment Use
Tax Rebate Program for Fort Collins Manufacturers.
RECOMMENDATION:
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT:
Based on prior years'experience, the Manufacturers Rebate program for tax years 2000 and 2001
could cost the City approximately$500,000 for each year. Costs can vary greatly depending on the
purchasing activity of local manufacturers.
EXECUTIVE SUMMARY:
In March 1996, City Council approved a temporary rebate program for use tax paid on
manufacturing equipment. The goal of the program was to maintain the local economic base by
providing modest tax relief to manufacturing concerns located in Fort Collins. The program has
provided rebates to manufacturers for 1996, 1997, 1998 and soon for 1999. Applications for each
program year are due at the end of March. Historically, many of the companies have requested
extensions to file at an even later date. Modifications were last made to the program in 1999 to
reflect several requests made by the manufacturing community. Staff is now requesting that Council
approve the program without any changes or modifications for 2001 and 2002(for rebates based on
2000 and 2001 taxes, respectively).
DATE: November 21, 2000 2 ITEM NUMBER: 20
BACKGROUND:
The Manufacturers Use Tax Rebate Program was initiated in 1996, and was intended to focus on
encouraging the reinvestment made by local manufacturing firms in new manufacturing equipment.
The program has provided the following results:
#of Companies Applied Amount Rebated
1996 10 $ 373,600
1997 17 $ 504,803
1998 10 $ 385,845
1999 13 $ 329,135
Total 50 $1,593,383
SUMMARY:
With the suspension of the Street Oversizing Fee Exemption Program and the Development Impact
Fee Rebate Program,the Manufacturers Use Tax Rebate Program remains as an economic incentive
for retaining our local manufacturers.
The City of Fort Collins has experienced strong growth in sales tax revenues over the past several
years. Staff recommends that the City continue the program in 2001 and 2002 as approved by
Council while carefully monitoring return tax collections. Staff is recommending that the program
be extended for the next two years, rather than only one year at a time, as in the past. This will
reduce the administrative and Council process required to keep the program in place, and puts the
renewal of the program on a schedule consistent with the biennial budget process. Safeguards
allowing for the review and termination of the program in the event financial conditions warrant will
remain in place throughout the two-year period.
ORDINANCE NO. 173, 2000
OF THE COUNCIL OF THE CITY OF FORT COLLINS
CONTINUING A TEMPORARY MANUFACTURING EQUIPMENT
USE TAX REBATE PROGRAM
FOR FORT COLLINS MANUFACTURERS
WHEREAS, the City Council first authorized a Temporary Manufacturing Equipment
Use Tax Rebate Program (the "Rebate Program") with the adoption of Ordinance No. 29, 1996;
and
WHEREAS, such Rebate Program was subsequently authorized for calendar years 1996,
1997, 1998, 1999, and 2000 (based on taxes paid in each prior year); and
WHEREAS, it is the intent of the City Council to continue the Rebate Program for the
period January 1, 2001 through December 31, 2001 (based on tax year 2000) and January 1,
2002 through December 31, 2002 (based on tax year 2001), unless otherwise modified and
extended.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City of Fort Collins Manufacturing Equipment Use Tax Rebate
Program, as described and previously approved by the Council by Ordinance No. 30,1999, is in
the best interests of the City.
Section 2. That the Council hereby extends the Rebate Program for calendar years
2001 and 2002 or until such earlier date that the Rebate Program is modified, extended or
terminated by the Council.
Section 3. That the Council may at any time modify, extend or terminate the Rebate
Program.
Section 4. That the City Manager shall continue to monitor the Rebate Program and
its projected costs and impacts, and if the City Manager determines from that review, or from
any other information, that the Rebate Program poses a financial, environmental or other threat
to the well-being of the City, the City Manager shall report such determination to the Council.
Section 5. That the Rebate Program may be discontinued, at the discretion of the
Council, upon finding that the costs of the Program are contrary to the financial well-being of the
City or upon finding the Program is not compatible with the City's Economic Policy.
Section 6. That the provisions of this Ordinance shall not be construed as
establishing any right or entitlement to a rebate of any taxes on the part of any applicant and that
the actual rebate of use taxes under such Rebate Program shall be entirely discretionary with the
City Council and shall be subject to the appropriation of funds for such purpose.
Introduced, considered favorably on first reading, and ordered published this 21st day of
November, A.D. 2000, and to be presented for final passage on the 19th day of December, A.D.
2000.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading this 19th day of December, A.D. 2000.
Mayor
ATTEST:
City Clerk