The URL can be used to link to this page

Home My WebLink AboutCOUNCIL - AGENDA ITEM - 12/18/2007 - SECOND READING OF ORDINANCE NO. 141, 2007, APPROPR ITEM NUMBER: 8 AGENDA ITEM SUMMARY DATE: December18, 2007 FORT COLLINS CITY COUNCIL STAFF: Mike Freeman Chuck Seest SUBJECT Second Reading of Ordinance No. 141,2007,Appropriating Unanticipated Revenue in the City Sales and Use Tax Fund and Authorizing the Transfer of Appropriated Amounts Between Funds. RECOMMENDATION Staff recommends adoption of this Ordinance on Second Reading. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on December 4, 2007, increases total City 2007 appropriations by$2,667,000. Of that amount, this Ordinance increases General Fund 2007 estimated revenues by $2,000,000. This Ordinance also increases the estimated revenues for the Capital Projects Fund($222,333),the Natural Areas Fund($222,333), and the Transportation Fund ($222,334)due to greater than projected collections of the following dedicated sales and use taxes: 0.25 Building on Basics,0.25 Open Space Yes, and 0.25 City Street Maintenance sales and use tax, respectively. This Ordinance only appropriates the transfer of the additional sales and use taxes from the Sales Tax Fund to the above funds. It does not increase appropriations within those related funds. These additional revenues will increase the reserves in the related funds as of year-end 2007. Appropriations for expenditure from the various fund balance reserves will be presented to City Council during the first quarter of 2008. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- December 4, 2007. ATTACHMENT 1 ITEM NUMBER: 10 AGENDA ITEM SUMMARY DATE: December 4, 2007 FORT COLLINS CITY COUNCIL TyN SFF: Mike Freeman Chuck Seest SUBJECT gy First Reading of Ordinance No. 141, 2007,Appropriating Unanticipated Revenue in the City Sales and Use Tax Fund and Authorizing the Transfer of Appropriated Amounts Between Funds. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. EXECUTIVE SUMMARY This Ordinance increases to City app p ti syi2 67,000. Of that amount, this Ordinance increases General d 200 stim venu000,000. This Ordinance also increases the estimated revenue e r is F ,333),the Natural Areas Fund ($222,333),and the Transportation Fund($222,334)due to greater than projected collections of the following dedicated sales and use taxes: 0.25 Building on Basics, 0.25 Open Space Yes, and 0.25 City Street Maintenance sales and use tax, respectively. This Ordinance only appropriates the transfer of the additional sales and use taxes from the Sales Tax Fund to the above funds. It does not increase appropriations within those related funds. These additional revenues will increase the reserves in the related funds as of year-end 2007. Appropriations for expenditure from the various fund balance reserves will be presented to City Council during the first quarter of 2008. BACKGROUND The City's sales tax collections have been under significant pressure over the past five years. After adjusting for a one-time collectio 2.1 io b ss saction in 2006, the past five years have included two negat ye ss th 50 ) t ee years of nominal increases of 3.00% or less. 3 Within this constrained revenue environment and utilizing the assistance of Economic Planning Systems(EPS),outside consultants specializing in municipal revenue forecasts,the City developed a new model to forecast sales tax collections and other primary sources of government revenue. This model forecast an increase of slightly less than 2.00% for 2007. The City's retail environment has benefitted from a number of trends during 2007. The rising cost of energy has resulted in significant increases in shipping that have been passed on to the consumer, December 4, 2007 -2. Item No. 10 particularly in grocery food items. Sales tax collections for the grocery food category have experienced monthly increases of between 7.50% and 10.50% as compared to 2006, resulting in a 2007 year to date increase of 8.50% thru the end of October. At the same time, the costs of large ticket consumer electronic gCcal o Yrected large screen high definition televisions have fallen dram are n e e to a greater percentage of households. The sales tax collo s ca g avmonthly increases ofbetween 11.00%and 19.50% as compa0 in a 2 date increase of 14.00%thm the end of October. When combined, the grocery food category and the category which includes consumer electronics represent approximately 20% of overall sales tax collections. While the City has enjoyed strong overall performance in retail sales activity during 2007,there are a few categories that are under increasing pressure. General merchandise has experienced a 2007 year-to-date increase of 2.50%thru the end of October as compared to 2006. However,the opening of the Wal-Mart SuperCenter in Loveland and the scheduled store in Timnath will attract significant sales from Fort Collins. This percentage will erode through the end of 2007. Additionally, the apparel category has experienced a 2007 year-to-date decrease of 4.50%through the end of October as compared to 2006. This category will not improve until new retail formats for apparel are introduced into the Fort Collins. The majority of this category is contingent on efforts to renovate the Foothills Mall. When combined, these two categories represent approximately 20%of overall sales tax collections. In light of the volatility in reta' sales activi p se eY staff waited until December to present this ordinance to City uncil i rder t e ent information available. The above trends were discussed in i o '1 Fimmittee. At this time, the City has experienced a 2007 year-to-date increase of 6.20%through the end of October as compared to 2006. Staff estimates this will result in an additional$1.5 to $2.0 million of sales tax for the City's General Fund as compared to the original projection. This Ordinance authorizes the appropriation and transfer of those actual collections from the City's Sales Tax Fund to the City's General Fund and the related funds that utilize the dedicated quarter cent sales taxes. ORDINANCE NO. 141, 2007 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING UNANTICIPATED REVENUE IN THE CITY SALES AND USE TAX FUND AND AUTHORIZING THE TRANSFER OF APPROPRIATED AMOUNTS BETWEEN FUNDS WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins (the"Charter") permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year,provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year, do not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS,Article V, Section 10,of the Charter authorizes the City Council to transfer by ordinance any unexpended and unencumbered amount or portion thereof from one fund to another fund, provided that the purpose for which the transferred funds are to be expended remains unchanged; and WHEREAS, the City has unanticipated sales and use tax revenue available to appropriate; and WHEREAS, the City wishes to provide for the transfers listed below and the City Manager recommends that these transfers be made. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated from unanticipated revenue in the Sales and Use Tax fund the sum of TWO MILLION SIX HUNDRED SIXTY-SEVEN THOUSAND DOLLARS ($2,667,000) for transfer to the following funds: Transfer to General Fund $2,000,000 Transfer to 0.25 cent Building on Basics Capital Projects Fund 222,333 Transfer to 0.25 cent Natural Areas Fund 222,333 Transfer to 0.25 cent Transportation Services Fund 222,334 Total $2,667,000 Introduced, considered favorably on first reading, and ordered published this 4th day of December, A.D. 2007, and to be presented for final passage on t 8th day of December, A.D. 2007. Mayo 4T"tESTL ECG aEnst� City Clerk � 0 Passed and adopted on final reading on the 18th day of December, A.D. 2007. Mayor ATTEST: City Clerk