HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/03/2002 - RESOLUTION 2002-085 SUBMITTING TO THE REGISTERED E AGENDA ITEM SUMMARY ITEM NUMBER: 31
FORT COLLINS CITY COUNCIL DATE: September 3, 2002FROM
John Fischbach
SUBJECT :
Resolution 2002-085 Submitting to the Registered Electors of the City a Proposed Twenty-Five
One Hundredths Percent (0.25%) Sales and Use Tax on All Taxable Services and Tangible
Personal Property Except Food and a Proposed One Percent (1%) Construction Excise Tax for
the Purpose of Obtaining Additional Revenues to Fund Certain Transportation Capital Projects.
RECOMMENDATION:
Staff recommends that the two tax measures to placed on the November ballot. Staffs
recommendation regarding packaging the ballot measures remains unchanged. Staff continues
to concur with the recommendation of the survey consultant who encourages placing the
measures in two separate ballot items. However, staff recognizes that placing the measures in a
combined package has some merit.
EXECUTIVE SUMMARY:
Option A: One Ballot measure that includes a proposed 0.25 percent increase in City sales
and use tax and a proposed 1% construction excise tax to fund certain transportation capital
improvement projects
Option B: Two separate tax ballot measures
• A proposed 0.25 percent increase in City sales and use tax to fund certain
transportation capital improvement projects; and
• A proposed 1% construction excise tax to fund the same transportation capital
improvement projects
BACKGROUND:
On August 20, City Council adopted a resolution supporting the Council Transportation Funding
Committee's long-term funding strategy for Transportation Capital needs. The four-pronged
strategy commits to pursuing a 20 year, 0.25 cent Sales and Use Tax, a I% construction excise
tax, a transportation maintenance fee (TMF), and an annual General Fund allocation of
$1,000,000 for transportation capital. The two tax measures will require voter approval, while
the TMF proposal and the General Fund commitment can be accomplished by Council action.
The goal of the funding package is to address a $1.3 Billion transportation construction capital
need over the next 20 years. Though approximately $700 million of that need is potentially
funded through new development, existing city revenue and matching state and federal funds,
the remaining $546 million is currently unfunded. The proposed package of funding sources
would address $213 million of that shortfall, or approximately$10.3 million per year.
The first year revenue amounts in the ballot language are higher than the estimated revenues that
the City expects to receive. This has been done to avoid any further legal objections based on
the TABOR amendment that might arise should actual first year revenues exceed estimates.
DATE: September 3, 2002 2 ITEM NUMBER: 31
I In order to implement the Council's four-pronged approach to funding Transportation Capital
needs, City Council will place the tax measures on the November 2002 ballot. These items
include:
i
1. A proposed 0.25 percent increase in City sales and use tax
2. A proposed I% construction excise tax
Both taxes are proposed to run for a term of 20 years, with the sales and use tax beginning
January 1, 2003 and the construction excise tax beginning April 1, 2003.
Key elements of the proposed taxes include:
I
1. Sales and Use Tax
• 0.25 percent tax, which equals 25 cents per $100 purchase;
• Does not apply to grocery food and prescription drugs;
• Brings the sales and use tax rate in the City to 6.95%, including State and
County sales taxes;
• Tax will yield approximately $5.9 million per year;
j • Tax will expire December 31, 2022
I
2. Construction Excise Tax
• 1% tax on the cost of construction;
• Tax is calculated based on the builder's estimate of construction costs at
the time a building permit is issued;
• The tax will not apply to remodeling projects that require a building
permit, except when the remodeling either adds a dwelling unit, or adds
square footage to a commercial property;
• Qualified affordable housing projects will be exempt from the tax;
• Tax will generate approximately $2 million per year;
I
• Tax will expire March 31, 2023.
To select the specific projects that will be funded through the funding strategy, the ballot
measure provides that the City Council will adopt a Transportation Capital Improvement plan at
least every four years, based upon the Transportation Master Plan and the community's evolving
needs. The measures also specifically name four initial high priority projects, including:
• The widening and improvement of Timberline Road from Drake Road to
Prospect Road.
• The improvement and extension of the Mason Street Transportation
Corridor.
• An overpass or underpass and other improvements to L.emay Avenue near
i the intersection of Vine Drive.
0 Other intersection improvements throughout the City.
September J,
DATE: ITEM NUMBER:
Two options are presented for Council consideration at this meeting.
• Option A presents the two proposed taxes in one ballot measure.
• Option B presents the two measures as separate items on the November
ballot.
It is important to note that, with the longer ballot language in Option A, Larimer County has
indicated that it may be more likely to only include the ballot measure title on the actual ballot.
If that is the case, the full language of the ballot measure would be placed on a separate piece of
paper. The County's final decision on the appearance of the ballot will be made after all of the
participants in the combined election have submitted their ballot language.
RESOLUTION 2002-085
OF THE COUNCIL OF THE CITY OF FORT COLLINS
SUBMITTING TO THE REGISTERED ELECTORS OF THE CITY
A PROPOSED TWENTY-FIVE ONE HUNDREDTHS PERCENT (0.25%)
SALES AND USE TAX ON ALL TAXABLE SERVICES
AND TANGIBLE PERSONAL PROPERTY EXCEPT FOOD
AND A PROPOSED ONE PERCENT (1%) CONSTRUCTION
EXCISE TAX, FOR THE PURPOSE OF OBTAINING ADDITIONAL
REVENUES TO FUND CERTAIN TRANSPORTATION CAPITAL PROJECTS
WHEREAS,on August 20,2002, the City Council adopted Resolution 2002-081, adopting
a strategy for long term transportation capital funding for the City; and
WHEREAS, such strategy includes the imposition of a new twenty-year.025 cent sales and
use tax dedicated to transportation capital, exempting groceries and prescription drugs, as well as
a new twenty year I% construction excise tax for the same purpose; and
WHEREAS,in view of the City's pressing transportation capital improvement needs and the
lack of sufficient revenues to fund those needs,the City Council believes it to be in the best interest
of the City to submit to the registered electors of the City the question of whether the foregoing taxes
should be imposed by the Council; and
WHEREAS, the imposition of a new tax requires voter approval under Article X, Section
20 of the Colorado Constitution; and
WHEREAS, by Ordinance No. 100, 2002, the City Council has called a special election to
be held in conjunction with the November general election on November 5, 2002.
NOW,THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the following question shall be submitted to the registered electors of the City of Fort
Collins at the special municipal election to be held on November 5, 2002:
i
OPTION A.
CITY OF FORT COLLINS
BALLOT ISSUE
A CITY-INITIATED MEASURE PROPOSING A 0.25 PERCENT INCREASE IN CITY SALES
AND USE TAXES AND A PROPOSED 1% CONSTRUCTION EXCISE TAX TO FUND CERTAIN
TRANSPORTATION CAPITAL IMPROVEMENT PROJECTS
SHALL CITY OF FORT COLLINS TAXES BE INCREASED BY AN ESTIMATED$9.l MILLION FOR THE
FIRST FULL FISCAL YEAR AND BY SUCH AMOUNTS AS MAY BE GENERATED ANNUALLY
THEREAFTER BY:
• AN INCREASE IN THE RATE OF SALES AND USE TAXES OF 0.25 PERCENT
(25a ON A $100 PURCHASE), TO BE IMPOSED ON ALL TAXABLE ITEMS
EXCEPT FOOD, TO COMMENCE JANUARY 1, 2003, AND TO EXPIRE
DECEMBER 31, 2022;AND
• THE IMPOSITION OF AN EXCISE TAX UPON THE ISSUANCE OF BUILDING
PERMITS FOR ALL NEW CONSTRUCTION AND RECONSTRUCTION IN THE
CITY EXCEPT FOR RESIDENTIAL REMODELING PROJECTS THAT DO NOT
CREATE ADDITIONAL DWELLING UNITS AND COMMERCIAL AND
INDUSTRIAL REMODELING PROJECTS THAT DO NOT ADD SQUARE
FOOTAGE, AND EXCEPT FOR QUALIFIED AFFORDABLE HOUSING
PROJECTS,AT THE RATE OF ONE PERCENT(1.00%)OF THE COST OF SUCH
CONSTRUCTION OR RECONSTRUCTION,TO COMMENCE APRIL 1,2003,AND
TO EXPIRE MARCH 31,2023
WITH THE PROCEEDS OF SUCH NEW TAXES,TOGETHER WITH INVESTMENT EARNINGS THEREON,
TO BE USED TO PAY FOR THE PLANNING, DESIGN, ACQUISITION AND CONSTRUCTION OF
CERTAIN TRANSPORTATION CAPITAL IMPROVEMENT PROJECTS, TO BE DESIGNATED BY THE
CITY COUNCIL NO LESS THAN ONCE EVERY FOUR (4) YEARS AS THE HIGHEST PRIORITY
TRANSPORTATION PROJECTS SHOWN ON A TWENTY(20)YEAR TRANSPORTATION MASTER PLAN,
WITH THE FIRST PROJECTS SO DESIGNATED TO INCLUDE, BUT NOT BE LIMITED TO, THE
FOLLOWING:
• THE WIDENING AND IMPROVEMENT OF TIMBERLINE ROAD FROM DRAKE
ROAD TO PROSPECT ROAD;
• THE IMPROVEMENT AND EXTENSION OF THE MASON STREET
TRANSPORTATION CORRIDOR;
• AN OVERPASS OR UNDERPASS AND OTHER IMPROVEMENTS TO LEMAY
AVENUE NEAR THE INTERSECTION OF VINE DRIVE;
• OTHER INTERSECTION IMPROVEMENTS THROUGHOUT THE CITY;
WITH EACH SUCH PROJECT TO BE CONTINGENT UPONTHE AVAILABILITY OF SUFFICIENT LOCAL,
STATE AND/OR FEDERAL FUNDS TO COMPLETE THE PROJECT AND WITH THE SCOPE,COST AND
SCHEDULING OF EACH PROJECT TO BE DETERMINED BY THE CITY COUNCIL;AND SHALL THE
CITY OF FORT COLLINS BE AUTHORIZED TO COLLECT AND EXPEND ALL OF THE PROCEEDS OF
SUCH TAX INCREASES AND INVESTMENT EARNINGS THEREON, NOTWITHSTANDING ANY
APPLICABLE LIMITATION ON REVENUES AND EXPENDITURES,INCLUDING THE LIMITATIONS SET
FORTH IN ARTICLE X,SECTION 20 OF THE COLORADO CONSTITUTION?
. YES
NO
Option B.
CITY OF FORT COLLINS
BALLOT ISSUE
A CITY-INITIATED MEASURE PROPOSING
A 0.25 PERCENT INCREASE IN CITY SALES AND USE TAXES
TO FUND CERTAIN TRANSPORTATION CAPITAL IMPROVEMENT PROJECTS
SHALL CITY OF FORT COLLINS TAXES BE INCREASED BY AN ESTIMATED$6.6 MILLION FOR
THE FIRST FULL FISCAL YEAR AND BY SUCH AMOUNTS AS MAY BE GENERATED ANNUALLY
THEREAFTER BY AN INCREASE IN THE RATE OF SALES AND USE TAXES OF 0.25 PERCENT(25¢
ON A$100 PURCHASE),TO BE IMPOSED ON ALL TAXABLE ITEMS EXCEPT FOOD,TO
COMMENCE JANUARY 1,2003,AND TO EXPIRE DECEMBER 31,2022;WITH THE PROCEEDS OF
THIS SALES AND USE TAX INCREASE,TOGETHER WITH INVESTMENT EARNINGS THEREON,TO
BE USED TO PAY FOR THE PLANNING,DESIGN,ACQUISITION AND CONSTRUCTION OF
CERTAIN TRANSPORTATION CAPITAL IMPROVEMENT PROJECTS,TO BE DESIGNATED BY THE
CITY COUNCIL NO LESS THAN ONCE EVERY FOUR(4)YEARS AS THE HIGHEST PRIORITY
TRANSPORTATION PROJECTS SHOWN ON A TWENTY(20)YEAR TRANSPORTATION MASTER
PLAN,WITH THE FIRST PROJECTS SO DESIGNATED TO INCLUDE, BUT NOT BE LIMITED TO,THE
FOLLOWING:
THE WIDENING AND IMPROVEMENT OF TIMBERLINE ROAD FROM
DRAKE ROAD TO PROSPECT ROAD;
• THE IMPROVEMENT AND EXTENSION OF THE MASON STREET
TRANSPORTATION CORRIDOR;
• AN OVERPASS OR UNDERPASS AND OTHER IMPROVEMENTS TO LEMAY
AVENUE NEAR THE INTERSECTION OF VINE DRIVE;
• OTHER INTERSECTION IMPROVEMENTS THROUGHOUT THE CITY;
WITH EACH SUCH PROJECT TO BE CONTINGENT UPON THE AVAILABILITY OF SUFFICIENT
LOCAL, STATE AND/OR FEDERAL FUNDS TO COMPLETE THE PROJECT AND WITH THE SCOPE,
COST AND SCHEDULING OF EACH PROJECT TO BE DETERMINED BY THE CITY COUNCIL:AND
SHALL THE CITY OF FORT COLLINS BE AUTHORIZED TO COLLECT AND EXPEND ALL OF THE
PROCEEDS OF SUCH SALES AND USE TAX INCREASE AND INVESTMENT EARNINGS THEREON,
NOTWITHSTANDING ANY APPLICABLE LIMITATION ON REVENUES AND EXPENDITURES,
INCLUDING THE LIMITATIONS SET FORTH IN ARTICLE X,SECTION 20 OF THE COLORADO
CONSTITUTION?
YES
NO
• CITY OF FORT COLLINS
BALLOT ISSUE
A CITY-INITIATED MEASURE PROPOSING
A 1%a CONSTRUCTION EXCISE TAX TO FUND
CERTAIN TRANSPORTATION CAPITAL IMPROVEMENT PROJECTS
SHALL CITY OF FORT COLLINS TAXES BE INCREASED BY AN ESTIMATED$2.5 MILLION FOR THE
FIRST FULL FISCAL YEAR AND BY SUCH AMOUNTS AS MAY BE GENERATED ANNUALLY
THEREAFTER BY THE IMPOSITION OF AN EXCISE TAX UPON THE ISSUANCE OF BUILDING PERMITS
FOR ALL NEW CONSTRUCTION AND RECONSTRUCTION IN THE CITY EXCEPT FOR RESIDENTIAL
REMODELING PROJECTS THAT DO NOT CREATE ADDITIONAL DWELLING UNITS AND
COMMERCIAL AND INDUSTRIAL REMODELING PROJECTS THAT DO NOT ADD SQUARE FOOTAGE,
AND EXCEPT FOR QUALIFIED AFFORDABLE HOUSING PROJECTS,AT THE RATE OF ONE PERCENT
(1.00%)OF THE COST OF SUCH CONSTRUCTION OR RECONSTRUCTION,TO COMMENCE APRIL I,
2003, AND TO EXPIRE MARCH 31, 2023, WITH THE PROCEEDS OF THIS TAX, TOGETHER WITH
INVESTMENT EARNINGS THEREON, TO BE USED TO PAY FOR THE PLANNING, DESIGN,
ACQUISITION AND CONSTRUCTION OF CERTAIN TRANSPORTATION CAPITAL IMPROVEMENT
PROJECTS, TO BE DESIGNATED BY THE CITY COUNCIL NO LESS THAN ONCE EVERY FOUR (4)
YEARS AS THE HIGHEST PRIORITY TRANSPORTATION PROJECTS SHOWN ON A TWENTY-YEAR
TRANSPORTATION MASTER PLAN,WITH THE FIRST PROJECTS SO DESIGNATED TO INCLUDE,BUT
NOT BE LIMITED TO,THE FOLLOWING:
THE WIDENING AND IMPROVEMENT OF TIMBERLINE ROAD FROM DRAKE
ROAD TO PROSPECT ROAD;
THE IMPROVEMENT AND EXTENSION OF THE MASON STREET
TRANSPORTATION CORRIDOR;
AN OVERPASS OR UNDERPASS AND OTHER IMPROVEMENTS TO LEMAY
AVENUE NEAR THE INTERSECTION OF VINE DRIVE;
• OTHER INTERSECTION IMPROVEMENTS THROUGHOUT THE CITY
WITH EACH SUCH PROJECT TO BE CONTINGENT UPON THE AVAILABILITY OF SUFFICIENT LOCAL,
STATE AND/OR FEDERAL FUNDS TO COMPLETE THE PROJECT AND WITH THE SCOPE,COST AND
SCHEDULING OF EACH PROJECT TO BE DETERMINED BY THE CITY COUNCIL; AND SHALL THE
CITY OF FORT COLLINS BE AUTHORIZED TO COLLECT AND EXPEND THE PROCEEDS OF SUCH
CONSTRUCTION ACTIVITY EXCISE TAX AND INVESTMENT EARNINGS THEREON,
NOTWITHSTANDING ANY APPLICABLE LIMITATION ON REVENUES AND EXPENDITURES,
INCLUDING THE LIMITATIONS SET FORTH IN ARTICLE X, SECTION 20 OF THE COLORADO
CONSTITUTION?
_ YES
NO
Passed and adopted at a regular meeting of the City Council held this 3rd day of September,
A.D. 2002.
Mayor
. ATTEST:
City Clerk