HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/19/2000 - SECOND READING OF ORDINANCE NO. 173, 2000, CONTINU AGENDA ITEM SUMMARY ITEM NUMBER: 13
DATE: December 19, 2000
FORT COLLINS CITY COUNCIL Frank Bruno
FROM: Alan Krcmarik
SUBJECT:
Second 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 Second Reading.
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
IS 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. Ordinance No. 173, 2000, which
was unanimously adopted on First Reading on November 21, 2000, approves continuation of the
program without any changes or modifications for 2001 and 2002 (for rebates based on 2000 and
2001 taxes, respectively).
AGENDA ITEM SUMMARY ITEM NUMBER: 20
FORT COLLINS CITY COUNCIL DATE: November 21, 2000
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 oCeOri ce o i t 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 in r�� P y
EXECUTIVE SUMMARY:
In March 1996, City Council approved a temporary rebate program for use tax paid on
manufacturing equipment. The oal of the rogram was to maintain the local economic base by
providing modest tax relief to an ng c ns ca i ort Collins. The program has
provided rebates to manufact rs for 1 6, 19 nd s for 1999. Applications for each
program year are due at the a of o ally, man of the companies have requested
extensions to file at an even later at o ifications were ast 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).
L
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 cpy
504,803
1998 10 $ 385,845
1999 13 $ 329,135
Total 50 $1,593,383
SUMMARY:
With the suspension of the Str Ove i g Fe p n am and the Development Impact
Fee Rebate Program,the Man cturers e T e rogra remains as an economic incentive
for retaining our local rnanufacTftool ?
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 rogram in the event financial conditions warrant will
remain in place throughout th o" rio