HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/07/1999 - SECOND READING OF ORDINANCE NO. 178, 1999, CONTINU }
AGENDA ITEM SUMMARY ITEM NUMBER: 11 j
DATE: December 7, 1999
. FORT COLLINS CITY COUNCIL STAFF: Frank Bruno
Alan J. Krcmarik
SUBJECT:
Second Reading of Ordinance No. 178, 1999, 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
providing modest tax relief to manufacturing concerns located in Fort Collins. The program has
been authorized to provide rebates to manufacturers for 1997, 1998 and 1999. Modifications were
made to the program in 1999 to reflect several requests made by the manufacturing community.
Ordinance No. 178, 1999,which was unanimously adopted on First Reading onNovember 16, 1999,
approves continuation of the program without any changes or modifications for 2001.
AGENDA ITEM SUMMARY ITEM NUMBER: 18
DATE: November 16, 1999
FORT COLLINS CITY COUNCIL Frank Bruno
STAFF: Alan J. Krcmarik
SUBJECT:
First Reading of Ordinance No. 178, 1999,Continuing a Temporary Manufacturing Equipment Use
Tax Rebate Program For Fort Collins' Manufacturers.
RECOMMENDATION:
Staff recommends adoption of the Ordinance on First Reading.
c
i
FINANCIAL IMPACT:
Based on prior years rebate amounts, the 2000 Manufacturer's Rebate program will cost the City
approximately $500,000 / `• t
. ^V
t
1
EXECUTIVE SUMMARY:
In March 1996, City Council approved a temporary rebate program for use tax paid on
manufacturing equipment The`:goa f t e program was�main`Iain the local economic base by {
providing modest tax relief to manufa g concemsJoca�,m Fort Collins. The program has
been authorized to provide rebates to manufacturers for 1997, 1998 and 1999. Modifications were
made to the program in 1999 tote lect se3v ral rests made' the manufacturing community.
Staff is now requesting that Council approve the program without any changes or modifications for
2001.
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.
This type of investment used to be made every three or four years. The standard today is that the
reinvestment in equipment occurs even, fifteen to eighteen months. This type of continual
)ATE: November 16, 1999 2 ITEM NUMBER: 18
reinvestment could result in a relative windfall for the community since there is little added cost or
impact associated with existing firms.
The program has provided the following results:
#of Companies Applied Amount Rebated
1996 10 $ 373,600
1997 17 $ 504,803
1998 Estimate 10 $ 424,717
Totalt7 $1,303,120
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 local manufacturers.
The City of Fort Collins has experienced strong growth in sales and use tax revenues over the past
several years. Staff recommends that the City maintain the program in 2000 as approved by Council
while carefully monitoring return tax collections. In the event that a revenue shortfall should occur,
the program could be reevaluated forlo ' i e
- A
k� f
t