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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 01/02/2019 - KEEP FORT COLLINS GREAT SUNSETDATE: STAFF: January 2, 2019 Ginny Sawyer, Policy and Project Manager WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Keep Fort Collins Great Sunset. EXECUTIVE SUMMARY The purpose of this work session is to present Council with options for renewing/maintaining Keep Fort Collins Great revenue once the 0.85 tax sunsets on December 31, 2020. April 2019 is the anticipated election for a potential ballot related question to address funding needs. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council have a preferred option? 2. What additional information does Council need going forward? BACKGROUND / DISCUSSION Since 2011, KFCG has funded basic operations and enabled the City to both maintain a desired level of service and respond to community desires in an environment of population growth and annual inflation. The revenues from this tax are, by ballot, distributed to the following areas: 33% Street Maintenance and Repair 17% Other Transportation Needs 17% Police Services 11% Parks and Recreation 11% Other Community Priorities 11% Poudre Fire Authority Prior to the 2020 sunset of KFCG, and before building the 2021-22 budget, the City would like to fully engage the community in the decision of how to fund current service levels or make alternative plans for a lower service level at a lower cost. If the desire is to replace KFCG funds in full this can be achieved through a dedicated tax, an increase to the on-going base rate, or a combination of these. If City Council or the community decide NOT to replace KFCG revenue in full, then reduced levels of service from the general fund will need to be identified during the 2020 budget process for 2021-2022 budgets. Options The following options are based on Council and community conversations. Option A - Renew ▪ This option is a straight renewal of the existing tax although a change in term (5, 10, 15, 20 years) could be considered. January 2, 2019 Page 2 Option B - Base rate increase and a dedicated tax This option includes: ▪ A 0.6% increase to the base sales and use tax rate. The 0.6% amount covers current level KFCG contributions for Police, Streets, Fire, and Parks and Recreation programs and services. ▪ A 0.25% dedicated sales and use tax to be split between All Modes of Transportation (0.15%) and Sustainability (0.1%.) All Modes of Transportation would include sidewalks, bicycling, and road infrastructure as well as transit services. Sustainability would include Economic, Environmental, and Social Health programs and services. Option C - 0.85% added to the base sales and use tax rate with a 20-year guarantee of current KFCG level support This option would be a one-time vote to increase the base rate tax by 0.85%. Ballot language would be drafted to ensure current levels of KFCG support would be maintained in the existing program areas for a period of 20 years. After 20 years general fund revenue would continue to be prioritized by Council and the community to address needs and desires through a normal budgeting process. COMBINATIONS FOR SAME REVENUE Base Rate Total (GF) Base Rate Increase % Dedicated A Renew as dedicated 2.25 0 0.85 B Base & Dedicated 2.85 0.60 0.15 Transportation 0.10 Sustainability C Renew into Base 3.10 0.85 Guarantee 20-year period of KFCG level support Outreach Staff has been heavily engaged in public outreach on this topic since September. Specific outreach has included: Boards and Commissions Business/Community Groups Other Meetings • Economic Advisory Commission • Women’s Commission • Golf Board • Parks and Recreation Board • Zoning Board of Appeals • Downtown Development Authority • Air Quality Board • Transportation Board • Housing Catalyst Board • Affordable Housing Board (Jan 3) • Land Conservation and Stewardship Board (Jan 9) • Senior Advisory Board (Jan 9) • CDBG Commission (Jan 9) • Commission on Disability (Jan 10) • Human Relations • Campus West Merchants • UniverCity Connections • Visit Fort Collins Board • North Fort Collins Business Association • Fort Collins Chamber Legislative Committee • Downtown Business Association (Board & Members) • Leadership Fort Collins (Jan 10) • Six open meetings (one in each Council district) • Three open meetings for January 2, 2019 Page 3 Commission (Jan 10) All of these events have included background information and data related to KFCG and City financial information over time. The general questions put to these groups focused on “do residents like the current level of service they experience, and do they feel the service is provided at the right price.” Discussions also focus on the functions and specifics of base rate and dedicated taxes. In general, feedback highlights include: • Overall support for replacing all revenue. • Overall support for an increase to the base rate (particularly to cover police, streets, and fire.) • City revenue and expense is a challenging conversation for the public to be able to provide specific revenue options. • A majority of participants like the level of service with limited suggestions for where to reduce. A general open meeting has been scheduled for Thursday, January 10 at the Senior Center from 6-7:30 pm to present and discuss these options and any outcomes of the work session. Next Steps • January 22 work session • February 5 regular meeting- Last day to refer language for April ATTACHMENTS 1. Powerpoint presentation (PDF) 1 City Council Work Session January 2, 2018 Keep Fort Collins Great-2020 Sunset ATTACHMENT 1 Direction Sought 1. Does Council have a preferred option?? 2. What additional data does Council need on January 22? 2 Background § Since 1982, on-going sales tax rate = 2.25% § 3 dedicated ¼-cent taxes: § Street Maintenance § Capital Improvement § Open Space § Keep Fort Collins Great § .85% § 10-year sunset (2011-2020) Local Total: 3.85% 3 Keep Fort Collins Great Breakdown/Total 2011-18: • 33% Street Maintenance and Repair- $65M (~9M/annual) • 17% Other Transportation Needs- $32M ~4.5M/annual) • 17% Police Services- $32M (~4.5M/annual) • 11% Parks and Recreation- $22M (~3M/annual) • 11% Poudre Fire Authority- $21M (~3M/annual) • 11% Other Community Priorities- $22M (~3M/annual) • Annual Spending and Efficiency reports: fcgov.com/kfcg 4 KFCG Sunset Key Elements § KFCG revenue can be replaced in full or at another amount. § Base rate can be increased § Dedicated tax can be created § If the desire is to NOT replace KFCG revenue in full reduced levels of service from the general fund will need to be identified during the 2020 budget process. Council direction to date: § No additional tax on groceries § Don’t increase total tax burden 5 Outreach § Boards & Commissions § Business Groups § Open Meetings § Community Issue Forum § CityWork Alums Do you like the current level of service you experience as a resident? Is the price right? 6 Options COMBINATIONS FOR SAME REVENUE Base Rate Total (GF) Base Rate Increase % Dedicated A Renew as Dedicated 2.25 0 0.85 B Base & Dedicated 2.85 0.60 0.15 Transportation 0.10 Sustainability C Renew into Base 3.10 0.85 Guarantee 20-year period of KFCG level support 7 Timeline § January 10 Public Meeting § January 22 Work Session § Last Day to Refer Ballot language- February 5, 2019 § Election-April 2, 2019 8 Direction Sought 1. Does Council have a preferred option? 2. What additional data does Council need on January 22? 9 CityWork Alumni • Poudre Fire District Board • Coloradoan Editorial Board