HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/05/2019 - ITEMS RELATING TO EXTENDING THE KEEP FORT COLLINSAgenda Item 17
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AGENDA ITEM SUMMARY February 5, 2019
City Council
STAFF
Ginny Sawyer, Policy and Project Manager
John Duval, Legal
SUBJECT
Items Relating to Extending the Keep Fort Collins Great Tax.
EXECUTIVE SUMMARY
A. Possible Public Hearing and Motions Regarding Protest(s) of Ballot Language.
B. Resolution 2019-019 Submitting a Ballot Issue Question to the City’s Registered Electors at the City’s
Regular Election on April 2, 2019, Asking Them to Extend the “Keep Fort Collins Great” .85% Sales and
Use Tax Voters Approved in 2010.
BALLOT LANGUAGE AMENDED 02/04/2019
The purpose of this item is to set the ballot language and refer the 0.85% Keep Fort Collins Great tax amount to
the April 2, 2019, election.
Any protest of the proposed ballot language must be received no later than Monday, February 4, 2019, at noon.
The protest(s) shall be heard, considered, and resolved by Council prior to adoption of Resolution 2019- 019. If
protest(s) are received, copies will be included in Council’s “Read-before” packet.
Since 2011, the voter-approved Keep Fort Collins Great 0.85% sales tax has funded basic operations and
enabled the City to maintain a desired level of service and respond to community desires in an environment of
population growth and annual inflation.
Prior to the 2020 sunset of KFCG, and before building the 2021-22 budget, the City has been engaging the
community in the decision of how to fund current service levels. After a year-plus effort including multiple Council
discussions, board and commission outreach, and public engagement, a Resolution presenting ballot language
for the April 2, 2019, election is being presented for Council consideration. This ballot option does not increase
the overall local tax rate.
Please note that in the ballot question the dollar amount for the estimate of the first fiscal year revenues is left
blank. City staff is continuing to work on what this estimate should be. Council will be provided with a memo in
its “Read Before” packet on Tuesday with the dollar amount to insert into the ballot question.
Protest hearings pursuant to City Code Section 7-88 (regarding re-districting) and Section 7-156 (regarding ballot
title and/or submission clause) shall be conducted in the following order, as part of the agenda item for the item
under protest:
Announcement of Item;
Staff Presentation for Agenda Item;
Presentation by each person who timely filed a Protest;
Councilmember questions of City staff and the protesting parties; and
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Motion on each Protest, discussion and vote on each Protest the by the City Council.
After completion of the Protest Hearing, Council will return to the Agenda Item and receive citizen comments
from any persons desiring to speak on the Agenda Item.
STAFF RECOMMENDATION
Staff recommends adoption of Resolution 2019-019.
BACKGROUND / DISCUSSION
The City’s current local tax burden is 3.85%. The on-going general tax rate is 2.25% and has not changed in 36
years. There are three dedicated and temporary ¼-cent taxes (Open Space, Street Maintenance, Community
Capital) totaling .75% and the Keep Fort Collins Great (KFCG) .85% dedicated tax that expires on December
31, 2020.
In 2008-2009, the City was experiencing significant revenue shortfalls. In response, a major community dialogue
was launched to engage the public regarding choices surrounding elimination of services and identification of
new revenue.
The end-result of these efforts and dialogues was the passage of KFCG, a .85 dedicated sales tax, in November
2010. By vote, these dollars support the following operations:
33% Street Maintenance and Repair
17% Other Transportation Needs
17% Police Services
11% Parks and Recreation
11% Other Community Priorities
11% Fire Protection and Other Emergency Services (Poudre Fire Authority)
The City utilizes KFCG dollars to fund numerous programs and basic services. Each year a summary report of
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KFCG funds and projects is created and posted online allowing residents to see all projects funding by KFCG
dollars (www.fcgov.com/kcfg).
For over a year, staff has been engaging the public and Council on what a sunset of KFCG means and possible
revenue replacement options. The following general themes emerged throughout the engagement process:
Residents support City services.
On the whole residents are happy with the services they receive.
People recognize that the on-going base rate has not increased in 36-years and yet demands for
operations and maintenance have increased in that time.
There were few suggestions for reductions in service and no consensus within the suggestions.
While majority support an on-going base rate option, some would prefer a renewable option.
On January 22, 2019, a majority of Council expressed support for bringing forward ballot language for a one
time vote to increase the base sales tax rate by 0.85%. However, this tax would not be imposed on food for
home consumption. (Attachment 1)
This option for revenue replacement when KFCG sunsets does not increase the local tax rate, but it does require
a TABOR election.
CITY FINANCIAL IMPACTS
As previously stated, proposed ballot language does NOT increase the current local sales tax rate.
Resolution 2019-019 would increase the ongoing sales tax rate by 0.85% on January 1, 2021 following the
sunset of KFCG.
The language includes existing KFCG exemptions, most notably not taxing food for home consumption and not
imposing the use tax on manufacturing equipment. It also continues the existing level of contributions for fire
protection and other emergency services, 11% of the tax revenues.
The remaining revenue would be collected as General Fund revenue and would be prioritized and allocated by
Council and the community to address needs and desires through the budgeting process, with the exception of
the fire protection amount.
BOARD / COMMISSION RECOMMENDATION
Staff met with 18 City boards and commissions to discuss the KFCG sunset and possible revenue replacement
options. Most boards supported replacing revenue in full (0.85%) with few boards voicing a preferred option.
Written recommendations are attached. (Attachment 2).
PUBLIC OUTREACH
Staff hosted and/or presented KFCG sunset information at:
9 public meetings
3 CityWork Alumni groups
2 service clubs
Fort Collins Chamber legislative group and Leadership Fort Collins class
The Board of Realtors legislative group
Downtown Business Association Board and Membership meetings
North Fort Collins Business Association
Campus West Merchant Association
United Way staff
Poudre Fire District Board meeting
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Coloradoan Editorial Board
Visit Fort Collins Board
Multiple City staff department meetings
The feedback from these meetings is reflected in the general themes mentioned above.
ATTACHMENTS
1. Work Session Summary, January 22, 2019 (PDF)
2. Board and Commission Written Recommendations (PDF)
3. PowerPoint Presentation (PDF)
City Manager’s Office
City Hall
300 LaPorte Ave.
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
DATE: January 25, 2019
TO: Mayor Troxell and Councilmembers
FM: Ginny Sawyer, Project and Policy Manager
TH: Darin Atteberry, City Manager
Kelly DiMartino, Senior Assistant City Manager
RE: January 22, 2019 Work Session Summary: Keep Fort Collins Great Sunset
All Councilmembers were present, with Councilmember Cunniff joining by telephone.
Staff provided background, an update on outreach, and two options for revenue replacement.
Direction was sought on a preferred option for a referral to ballot.
Options presented:
Option A - Increase the City base sales tax rate by 0.85%.
A one-time vote to increase the base rate tax by 0.85%. This revenue would be general fund
revenue and would be prioritized and allocated by Council and the community to address needs
and desires through the budgeting process.
Option B - Increase the City base sales tax rate by 0.60% and put forward a 0.25% renewable
tax
A one-time vote to increase the base sales tax by 0.6% and a vote to consider a 0.25%
dedicated, renewable tax. The 0.6% amount covers all but 0.01% of current level KFCG
contributions for Police, Streets, Fire, and Parks and Recreation programs and services.
To maintain existing KFCG programs and services, the remaining 0.25% tax would support
“Other Transportation” and “Sustainability” programs and services.
General comments:
▪ Overall support for Option A based on:
o Funding core services
o Simplicity of ballot language
o Options to refine in future elections if not supported
▪ Would like any ballot language to be clear in fire protection support and in language
clarifying that local tax rate remains the same.
▪ Some support for Option B to allow for future conversations on service and tax rate.
Follow-up Items:
▪ Staff will bring Option A as ballot language to the February 5, 2019 regular Council
meeting.
ATTACHMENT 1
ATTACHMENT 2
1
City Council Regular Meeting
February 5, 2019
Keep Fort Collins Great-2020 Sunset
ATTACHMENT 3
Purpose
1. Possible Public Hearing and Motions Regarding Protest(s) of Ballot
Language.
2. Consideration of Resolution 2019-019: Submitting a 0.85% On-
going Sales Tax Option Before the Voters.
2
KFCG Conversation
November 2017
Council Finance Committee
February 2019
Council Meeting
3
Council Finance Committee
Council Work Session
Council Regular Meeting – Last day to refer to the April 2, 2019 Election
Option: Same Revenue
Resolution 2019-019:
Increase the City base sales tax rate by 0.85%.
• One-time vote to increase the base rate tax by 0.85%.
• Revenue prioritized and allocated by Council through budgeting process.
4
Ballot Language Basics
Resolution:
Maintain current local tax rate.
Provide funding for Fire Protection and Emergency services.
Exempt groceries and prescription drugs.
Exempt manufacturing from Use Tax.
Trigger TABOR election notice requirements.
5
Recommendation
Resolution 2019-019:
Submitting a 0.85% On-going Sales Tax Option Before the Voters.
Overall support from public outreach participants.
No consensus on reductions.
Maintains current level of service.
Assures prioritization of all funding through the budgeting process.
6
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BALLOT LANGUAGE AMENDED 02/04/2019
RESOLUTION 2019-019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
SUBMITTING A BALLOT ISSUE QUESTION TO THE CITY’S REGISTERED
ELECTORS AT THE CITY’S REGULAR ELECTION ON APRIL 2, 2019,
ASKING THEM TO EXTEND THE “KEEP FORT COLLINS GREAT”
.85% SALES AND USE TAX VOTERS APPROVED IN 2010
WHEREAS, on November 2, 2010, the City held a special election conducted as a
coordinated election with Larimer County; and
WHEREAS, at that election, the City’s electorate considered and 60% of those voting
approved a ballot issue question asking whether the City’s sales and use tax rate should be
increased from 3.00 % to 3.85% commencing on January 1, 2011, and ending midnight on
December 31, 2020, to be spent for these purposes:
(a) 33% for street maintenance and repair,
(b) 17% for other street and transportation needs,
(c) 17% for police services,
(d) 11% for fire protection and other emergency services,
(e) 11% for parks maintenance and recreation services, and
(f) 11% for other community priorities as determined by the City Council,
which tax rate increase is known as the “Keep Fort Collins Great” tax (the “KFCG Tax”); and
WHEREAS, since 2011, the KFCG Tax has funded basic City operations and enabled the
City to maintain a desired level of service and respond to community desires in an environment of
population growth and annual inflation; and
WHEREAS, in anticipation of the 2020 sunset of the KFCG Tax and its potential effect on
the City’s budget in future years, the City has engaged the community in the decision of how to
best fund current service levels in upcoming years and, after a year-plus effort, including multiple
City Council discussions, Board and Commission outreach and public engagement, the Council
has determined this can best be accomplished by asking the City’s electors to extend the KFCG
Tax; and
WHEREAS, the City Council has also determined that the KFCG Tax should be extended
without an expiration date and that using the revenues generated from this extended tax should not
be restricted to specific uses, with one exception, so that its revenues are available for City
operations, maintenance and any other public purposes; and
WHEREAS, the one exception the City Council has determined is necessary for the
restricted use of the revenues is that the City’s current funding of the fire protection and emergency
services being provided by the Poudre Fire Authority should be maintained for now at the same
11% of revenues as is now being provided under the KFCG Tax; and
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WHEREAS, Article X, Section 3 of the City’s Charter authorizes the City Council to
submit any question to a vote of the people at a regular City election.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings in the recitals set forth above.
Section 2. That there is hereby submitted to the City’s registered electors at the City’s
regular municipal election to be held on April 2, 2019, this ballot issue question with the following
ballot title and submission clause:
City-Initiated Ballot Issue Question No. 1
SHALL CITY OF FORT COLLINS TAXES BE INCREASED BY AN ESTIMATED [DOLLAR
AMOUNT] FOR THE FIRST FULL FISCAL YEAR (2021) AND BY ALL AMOUNTS
COLLECTED ANNUALLY THEREAFTER, BY EXTENDING, WITHOUT EXPIRATION,
THE CITY’S CURRENT “KEEP FORT COLLINS GREAT” .85% SALES AND USE TAX,
WHICH EXPIRES ON DECEMBER 31, 2020, WITH THE REVENUES FROM THIS TAX
USED AS FOLLOWS:
11% OF REVENUES SHALL BE USED TO FUND THE FIRE PROTECTION AND
EMERGENCY SERVICES BEING PROVIDED BY POUDRE FIRE AUTHORITY
(PFA) UNDER THE CITY’S EXISTING AGREEMENT WITH THE POUDRE
VALLEY FIRE PROTECTION DISTRICT (DISTRICT), OR IN SUCH OTHER
AMOUNT AS THE CITY AND DISTRICT MAY AGREE, BUT ABSENT AN
AGREEMENT BETWEEN THEM FOR PFA’S SERVICES, THESE REVENUES MAY
BE USED AS DETERMINED BY CITY COUNCIL; AND
ALL THE REMAINING REVENUES MAY BE USED FOR MUNICIPAL
OPERATIONS, MAINTENANCE AND ANY OTHER PUBLIC PURPOSES;
BUT THIS TAX SHALL NOT APPLY TO:
ITEMS NOW EXEMPT UNDER THE CITY CODE FROM THE CITY’S SALES AND
USE TAX; , INCLUDING FOOD FOR HOME CONSUMPTION; AND
FOOD FOR HOME CONSUMPTION; AND
REGARDING THE USE TAX ONLY, MANUFACTURING EQUIPMENT;
AND WITH ALL THE TAX REVENUES, AND INVESTMENT EARNINGS THEREON, TO
BE COLLECTED, RETAINED AND SPENT AS A VOTER-APPROVED REVENUE
CHANGE NOTWITHSTANDING THE SPENDING AND REVENUE LIMITATIONS OF
ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?
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_____ Yes/For
_____ No/Against
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 5th
day of February, A.D. 2019.
__________________________________
Mayor
ATTEST:
_____________________________
City Clerk