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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/17/2002 - ITEMS RELATING TO THE MANUFACTURER'S USE TAX REBAT AGENDA ITEM SUMMARY ITEM NUMBER: 35 A-B DATE: December 17, 2002 FORT COLLINS CITY COUNCIL Frank W. Bruno FROM: Alan J. Krcmarik SUBJECT : Items Relating to the Manufacturer's Use Tax Rebate Program. RECOMMENDATION: Staff recommends adoption of the Ordinances on Second Reading. EXECUTIVE SUMMARY: A. Second Reading of Ordinance No. 182, 2002, Appropriating Prior Year Use Tax Carryover Reserves for the Manufacturer's Use Tax Rebate Program. B. Second Reading of Ordinance No. 183, 2002, Appropriating Prior Year Use Tax Carryover Reserves for the Manufacturer's Use Tax Rebate Program for Symbios Logic. In March 1996, City Council approved a temporary rebate program for use tax paid on manufacturing equipment. The program was amended in February 1999 to include several changes suggested by staff and the manufacturing community. The goal of the program is to maintain the local economic base by providing modest tax relief to manufacturing concerns located in Fort Collins. During 2001, the City of Fort Collins received about $3.6 million in use tax receipts from eligible companies within the Standard Industrial Code classification for manufacturers. This constitutes 48% of all use tax paid by local businesses in 2001. Ordinance Nos. 182 and 183, 2002, were adopted 6-0 (Councilmember Kastein withdrawn) on First Reading on November 19, 2002. ORDINANCE NO. 182, 2002 . OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR USE TAX CARRYOVER RESERVES FOR THE MANUFACTURER'S USE TAX REBATE PROGRAM WHEREAS, in March 1996, the City Council originally approved a temporary rebate program for use tax paid on manufacturing equipment; and WHEREAS, the City Council extended that temporary program on an annual basis through tax year 1999, and in December 2000, adopted Ordinance No. 173, 2000, approving the rebate program for tax years 2000 and 2001; and WHEREAS, the goal of this program is to support the local economic base by providing modest tax relief to manufacturing concerns located in Fort Collins; and WHEREAS, in early 2002, twenty-five (25) application forms were sent to qualified manufacturers for rebates for the 2001 tax year; and WHEREAS, the City has received eleven (11) applications requesting rebates of 2001 use taxes for a total of approximately $430,000 to be returned to the manufacturers through the rebate program; and WHEREAS, the money to rebate these funds is available in the Sales and Use Tax Fund Use Tax Carryover Reserve; and WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated for expenditure from the Sales and Use Tax Fund Use Tax Carryover Reserve, the sum of FOUR HUNDRED THIRTY THOUSAND DOLLARS ($430,000) for the Manufacturer's Use Tax Rebate Program. Introduced, considered favorably on first reading and ordered published this 19th day of November, A.D. 2002 and to be presented for final passage on the 17th day of December, A.D. 2002. Mayor' ATTEST: _ALa City Clerk i I i Passed and adopted on final reading this 17th day of December, A.D. 2002. Mayor ATTEST: City Clerk ORDINANCE NO. 183, 2002 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR USE TAX CARRYOVER RESERVES FOR THE MANUFACTURER'S USE TAX REBATE PROGRAM FOR SYMBIOS LOGIC WHEREAS, in March 1996, the City Council originally approved a temporary rebate program for use tax paid on manufacturing equipment; and WHEREAS, the City Council extended that temporary program on an annual basis through tax year 1999, and in December 2000, adopted Ordinance No. 173, 2000, approving the rebate program for tax years 2000 and 2001; and WHEREAS, the goal of this program is to support the local economic base by providing modest tax relief to manufacturing concerns located in Fort Collins; and WHEREAS, after discussion with Symbios Logic it was decided that $12,611 of Manufacturing Use Tax Rebate was due to Symbios Logic from the City for the years 1996, 1997, and 1998; and WHEREAS, the money to rebate these funds is available in the Sales and Use Tax Fund • Use Tax Carryover Reserve; and WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby appropriated for expenditure from the Sales and Use Tax Fund Use Tax Carryover Reserve, the sum of TWELVE THOUSAND SIX HUNDRED AND ELEVEN DOLLARS ($12,611) for payment to Symbios Logic for the Manufacturer's Use Tax Rebate Program. Introduced, considered favorably on first reading and ordered published this 19th day of November, A.D. 2002 and to be presented for final passage onrhe.- 7th day of December, A.D. 2002. Mayor _- ATEST- T 4L City Clerk Passed and adopted on final reading this 17th day of December, A.D. 2002. Mayor ATTEST: City Clerk AGENDA ITEM SUMMARY ITEM NUMBER: 31 A-B DATE: November 19, 2002 FORT COLLINS CITY COUNCIL STAFF: Frank W. Bruno Alan J. Krcmarik SUBJECT: Items Relating to the Manufacturer's Use Tax Rebate Program. RECOMMENDATION: Staff recommends adoption ocio .11-144h es FstReadin FINANCIAL IMPACT: The 2002 Manufacturer's Use Tax Rebate program (for tax year 2001 rebates) will require an appropriation from the Sales and Use Tax Carryover Reserve of approximately $430,000. The Symbios Logic rebate r uires appro 'a on o h Sales and Use Tax Carryover Reserve of $12,611. Funds the Ma factu r' a Reb Program are not included in the 2002 budget. These funds are ida o d late ' e year so that the City Manager has a clearer picture of the City's financial position. Appropriating these funds will result in a reduction in reserves in the Sales and Use Tax Fund. EXECUTIVE SUMMARY: A. First Reading of Ordinance No. 182, 2002, Appropriating Prior Year Use Tax Carryover Reserves for the Manufacturer's Use Tax Rebate Pro ram. B. First Reading of OrdiCO3 . 2 opri g Prior Year Use Tax Carryover Reserves for the Man ate Progr for Symbios Logic. In March 1996, City Council approved a temporary rebate program for use tax paid on manufacturing equipment. The program was amended in February 1999 to include several changes suggested by staff and the manufacturing community. The goal of the program is to maintain the local economic base by providing modest tax relief to manufacturing concerns located in Fort Collins. During 2001, the City of Fort Collins received about $3.6 million in use tax receipts from eligible companies within the Standard Industrial Code classification for manufacturers. This constitutes 48% of all use tax paid by local businesses in 2001. NOTE: Councilmember Kastein has indicated that he will not be participating in the vote on this item because of his employment with LSI Logic. Therefore, this item has been placed on the discussion agenda in order to allow for a separate vote on the item. November 31 A-B DATE: ITEM NUMBER: BACKGROUND: Twenty-five application forms were sent to qualified manufacturers. Eleven (11) rebate applications were received. The eligible companies and the estimated amounts of their rebates are as follows: Company Estimated Rebate PBeIgium 2,281 Brewing 2,346 overnor 17,68$429,409 The appropriation for Symbios Logic results from rebates from the following years: YJa nt , Total $12,611 The payments to Symbios would have been in these prior years; however some amounts were disputed and have just been resolved in 2001. SUMMARY: Local manufacturing concernCt y PiYtytax base. The 2001 taxes paid reflect expansion at both Anheuser-Busch and Agilent Technologies. These companies are a vital component of our local economy.