HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/05/2017 - FIRST READING OF ORDINANCE NO. 166, 2017, APPROPRIAgenda Item 7
Item # 7 Page 1
AGENDA ITEM SUMMARY December 5, 2017
City Council
STAFF
Peggy Streeter, Senior Sales Tax Auditor
Mike Beckstead, Chief Financial Officer
John Duval, Legal
SUBJECT
First Reading of Ordinance No. 166, 2017, Appropriating Prior Year Reserves in the General Fund to
Reimburse Woodward, Inc. for Development Fees and Use Tax.
EXECUTIVE SUMMARY
The purpose of this item is to appropriate $42,614 of prior year reserves for a rebate to Woodward, Inc. for
use tax under an agreement that City Council approved on April 2, 2013 (Ordinance No. 055, 2013). The
agreement provides business investment assistance for the relocation of Woodward’s headquarters, as well as
an expansion of its manufacturing and office facilities to a new location at the corner of Lincoln Avenue and
Lemay Avenue. The project will retain or create between 1,400 and 1,700 primary jobs in the City.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
Agreement Summary
On April 2, 2013, City Council adopted Ordinance No. 055, 2013, approving an Economic Development Project
Agreement (Agreement) between the City, the DDA, and Woodward, Inc. The Agreement specifies Woodward
is eligible for a rebate in three areas:
• Use Tax on Construction Materials and Eligible Equipment (up to 80%)
• Development Fees (100%)
•Capital Improvement Expansion Fees and Utility PIF Fees (up to 50%).
Employment Level Requirements
The three rebate categories were offered with the stipulation that employment levels must reach or exceed
1,400 employees within the City by December 31, 2018.
• If a rebate request is made prior to December 31, 2018, the City will withhold 40% of the rebate until
set employment levels have been met. The remaining 60% of the earned rebates will be paid on the
schedule agreed upon by Woodward (see below).
• If the target employment level is reached after December 31, 2018 but before December 31, 2020,
Woodward will receive the retained 40 percent less $500,000 (combined between use tax and
development fee rebates). Woodward will not be entitled to the remaining 40 percent if the target level
is not reached by December 31, 2020.
Agenda Item 7
Item # 7 Page 2
Rebate Schedule as Agreed Upon with Woodward
Staff has developed a rebate schedule with Woodward which is consistent with the Agreement whereby two
rebate applications will be processed each year. The two applications per year consist of the following
components:
• Application 1 includes:
o January through June: Development Review and Capital Improvement Fees
• Application 2 includes:
o July through December: Development Review and Capital Improvement Fees
o January through December: Use Tax
Rebate funds will be appropriated by City Council biannually as part of the rebate process.
This rebate application is for both use tax and development fees paid from January through December 2016.
The rebate amount of development fees for the period January 1 through June 30, 2016, was minimal and is
being included with the request for fees from July 1, through December 31, 2016.
Year to Date
2016
Development
Fees
100%
CIE Fees
50%
Utility PIF
50%
Use Tax
80%
Not Eligible for
Rebate
Total
Total Fees Collected
$3,884 $0 $0 $83,924 $1,175 $88,983
Rebate Owed
3,884 0 0 67,139 N/A 71,023
Rebate Eligible for
Payment - 60% 2,330 0 0 40,284 N/A 42,614
Rebate Holdback - 40%
1,553 0 0 26,856 N/A 28,409
Backfill
0 0 0 17,511 N/A 17,511
For the application period, Woodward earned a total of $71,023 in rebates. Of that amount, 40% is held back
pending the aforementioned employee level requirements. The remaining 60% which totals $42,614 is
requested for rebate at this time. The 40% that is held back has been assigned within the General Fund in
recognition of the potential future obligation.
The current number of employees within the City is approximately 915. The number is anticipated to increase
upon completion of the Drake/Lemay renovation.
The use tax rebate includes a General Fund backfill requirement of the dedicated taxes:
• .25% Natural Areas
• .25% Streets and Transportation
• .25% Building on Basics Projects
• .85% Keep Fort Collins Great
CITY FINANCIAL IMPACTS
The total rebate amount is $42,614. The full amount will come from prior year General Fund Reserves and will
be appropriated for the purpose of remitting the rebate to Woodward.
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ORDINANCE NO. 166, 2017
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND TO
REIMBURSE WOODWARD, INC. FOR DEVELOPMENT FEES AND USE TAX
WHEREAS, the City, the Fort Collins Downtown Development Authority, and
Woodward, Inc. (“Woodward”) entered into that certain “Agreement with Woodward, Inc.”
dated April 16, 2013, (the “Agreement”), which Agreement provides business investment
assistance for the relocation of Woodward’s headquarters and the expansion of its manufacturing
and office facilities in Fort Collins; and
WHEREAS, the Agreement specifies that Woodward is eligible for reimbursement from
the City for the following paid by it to the City: (1) “Use Taxes” on “Construction Materials”
and “Eligible Equipment”, (2) “Development Fees”, and (3) “Capital Improvement Fees,” as
these terms are defined in the Agreement; and
WHEREAS, under the Agreement, Woodward can apply for reimbursement biannually
for Development Review and Capital Improvement Fees and once a year for the Use Tax rebate;
and
WHEREAS, all funds reimbursed must be appropriated by Council as part of the rebate
process; and
WHEREAS, the Agreement was approved by City Council pursuant to Ordinance No.
055, 2013, on April 2, 2013; and
WHEREAS, the current total amount due to Woodward for the period of January 1, 2016,
through December 31, 2016, for Development Fee and Use Tax eligible reimbursements is
$42,614; and
WHEREAS, in accordance with the terms of the Agreement, staff is requesting
appropriation of $42,614 from General Fund prior year reserves for these reimbursements to
Woodward; and
WHEREAS, Article V, Section 9, of the City Charter 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; and
WHEREAS, City staff have determined that the appropriations as described herein are
available and previously unappropriated in the General Fund; and
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
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Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated for expenditure from prior year reserves
in the General Fund the sum of FORTY-TWO THOUSAND SIX HUNDRED FOURTEEN
DOLLARS ($42,614) to reimburse Woodward for Development Fees and Use Tax as required
by the Agreement.
Introduced, considered favorably on first reading, and ordered published this 5th day of
December, A.D. 2017, and to be presented for final passage on the 19th day of December, A.D.
2017.
__________________________________
Mayor Pro Tem
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 19th day of December, A.D. 2017.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk