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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/07/2004 - ITEMS RELATING TO A CITIZEN-INITIATED ORDINANCE PROPTION 1 RESOLUTION 2004-101 OF THE COUNCIL OF THE CITY OF FORT COLLINS SUBMITTING PROPOSED CITIZEN-INITIATED ORDINANCE NO. 002, 2004, RELATING TO THE ELIMINATION OF SALES TAX ON GROCERY FOOD TO A VOTE OF THE REGISTERED CITY ELECTORS AT THE NEXT REGULAR MUNICIPAL ELECTION ON APRIL 5, 2005 WHEREAS, under Article X, Section 1 of the Charter of the City of Fort Collins, the registered electors of the city have the power to propose a measure to the Council, and if the Council fails to adopt a measure so proposed, then to adopt or reject such ordinance or resolution at the polls; and WHEREAS, an initiative petition proposing the elimination of the City's sales tax on grocery food has been submitted to the City; and WHEREAS, the City Clerk has certified said petition as sufficient for submission of the initiated ordinance to a vote of the people at a special municipal election and has presented said petition to the City Council as provided in Article X, Section 5(f)(4) of the City Charter; and WHEREAS, under Article X, Section 1(e) of the City Charter, upon presentation of an initiative petition certified as to sufficiency by the City Clerk, the Council must either adopt the citizen-initiated ordinance without alteration within thirty (30) days or submit said citizen-initiated ordinance in the form petitioned for, to the registered electors of the city; and WHEREAS, the City Council voted unanimously on August 17, 2004 not to adopt the initiated ordinance because of the severe impact that the measure's passage would have on the delivery of City services to the Fort Collins community; and WHEREAS, when a special election is requested in an initiative petition and the petition has been certified as sufficient, and the Council declines to adopt the measure, the measure must generally be submitted at the next special municipal election to be held within one-hundred twenty days of the Council's consideration of the measure, unless any other regular or special city election is to occur within said period, in which case the initiative measure must be consolidated with such other election; and WHEREAS, notwithstanding the foregoing general rule, Article X, Section 6(e) of the City Charter states that not more than one special election on citizen-initiated measures shall be held in any twelve (12) months; and WHEREAS, since a special election on a citizen-initiated measure has been held by the City on August 10, 2004, the above-referenced initiative petition relating to the reduction of sales tax on grocery food must be referred to the registered electors of the city at the next regular city election on April 5, 2005. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That there is hereby submitted to the registered electors of the City of Fort Collins at the next regular city election to be held on Tuesday, April 5, 2005, the following proposed citizen-initiated ordinance: CITIZEN-INITIATED ORDINANCE NO. 2, 2004 Whereas, the growth of taxation and regulatory burdens upon the private sector in Fort Collins has exceeded the growth of population plus inflation; and Whereas, said burdens are stunting the orderly development of Fort Collins, especially in comparison to nearby cities; Therefore, be it enacted by the citizens of Fort Collins that “(2.25) percent” in Section 25- 73(d)(1) of the Municipal Code is changed to “(2.25) percent prior to January 1, 2005; (1.5) percent on January 1, 2005; (0.75) percent on January 1, 2006; and (zero) percent on January 1, 2007;” Section 2. That the foregoing proposed citizen-initiated ordinance is hereby submitted to the registered electors of the City of Fort Collins at said regular municipal election in substantially the following form: CITIZEN-INITIATED ORDINANCE NO. 2, 2004 PROPOSED ORDINANCE An ordinance amending Section 25-73(d)(1) of the Code of the City of Fort Collins to phase in the elimination of the existing 2.25 percent City sales tax on food for domestic home consumption by reducing said sales tax to 1.5 percent on January 1, 2005; 0.75 on January 1, 2006; and zero percent on January 1, 2007. FOR THE ORDINANCE _____ AGAINST THE ORDINANCE _____ Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 7th day of September, A.D. 2004. __________________________________ Mayor ATTEST: _____________________________ City Clerk OPTION 2A ORDINANCE NO. 144, 2004 OF THE COUNCIL OF THE CITY OF FORT COLLINS CALLING A SPECIAL MUNICIPAL ELECTION TO BE HELD IN CONJUNCTION WITH THE NOVEMBER 2, 2004 LARIMER COUNTY GENERAL ELECTION WHEREAS, under Article X, Section 1 of the Charter of the City of Fort Collins, the registered electors of the city have the power to propose a measure to the Council, and if the Council fails to adopt a measure so proposed, then to adopt or reject such ordinance or resolution at the polls; and WHEREAS, an initiative petition proposing the elimination of the City's sales tax on grocery food has been submitted to the City; and WHEREAS, the City Clerk has certified said petition as sufficient for submission of the initiated ordinance to a vote of the people at a special municipal election and has presented said petition to the City Council as provided in Article X, Section 5(f)(4) of the City Charter; and WHEREAS, under Article X, Section 1(e) of the City Charter, upon presentation of an initiative petition certified as to sufficiency by the City Clerk, the Council must either adopt the citizen-initiated ordinance without alteration within thirty (30) days or submit said citizen-initiated ordinance in the form petitioned for, to the registered electors of the city; and WHEREAS, the City Council voted unanimously on August 17, 2004 not to adopt the initiated ordinance because of the severe impact that the measure's passage would have on the delivery of City services to the Fort Collins community; and WHEREAS, when a special election is requested in an initiative petition and the petition has been certified as sufficient, and the Council declines to adopt the measure, the measure must generally be submitted at the next special municipal election to be held within one-hundred twenty days of the Council's consideration of the measure, unless any other regular or special city election is to occur within said period, in which case the initiative measure must be consolidated with such other election; and WHEREAS, notwithstanding the foregoing general rule, Article X, Section 6(e) of the City Charter states that not more than one special election on citizen-initiated measures shall be held in any twelve (12) months; and WHEREAS, since a special election on a citizen-initiated measure has been held by the City on August 10, 2004, the above-referenced initiative petition relating to the reduction of sales tax on grocery food must be referred to the registered electors of the city at the next regular city election on April 5, 2005; and WHEREAS, the above-referenced prohibition against more than one special election within a 12-month period does not apply to Council initiated or referred measures; and WHEREAS, the City's 2005 budget and subsequent budgets may be severely affected by the passage of the proposed elimination of the sales tax on grocery food; and WHEREAS, accordingly, the Council has determined that, in order to better prepare the 2005 budget, it is in the best interests of the City to place the initiated measure on the November 2, 2004, ballot as a Council-initiated measure, so the City voters will approve or deny the measure prior to the 2005 fiscal year; and WHEREAS, the City Council therefore wishes to call a special municipal election on November 2, 2004, to be held in conjunction with the Larimer County General Election, for the purpose of submitting to the electorate of the City the above-referenced ballot measure as a Council- initiated measure. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That a Special Municipal Election in the City of Fort Collins is hereby called for Tuesday, November 2, 2004, which shall be held in conjunction with the Larimer County General Election and conducted in such form as shall be determined by the Larimer County Clerk and Recorder. Section 2. That the provisions of the Uniform Election Code of 1992 are hereby adopted with respect to the conduct of said election in lieu of the provisions of the Municipal Election Code of 1965. Section 3. That the City Clerk is hereby directed to certify the ballot content for the Special Municipal Election to the Larimer County Clerk no later than September 8, 2004. Section 4. That the City Manager's execution of an intergovernmental agreement with Larimer County for conducting the election dated September 3, 2004, is hereby approved and ratified by the Council. Section 5. That this Ordinance is expressly contingent upon the petition representatives for the above-referenced citizen-initiated measure executing a written withdrawal of their initiative petition in a form satisfactory to the City Attorney on or before September 17, 2004. Introduced, considered favorably on first reading, and ordered published this 7th day of September, A.D. 2004, and to be presented for final passage on the 21st day of September, A.D. 2004. Mayor ATTEST: City Clerk Passed and adopted on final reading this 21st day of September, A.D. 2004. Mayor ATTEST: City Clerk OPTION 2B RESOLUTION 2004-109 OF THE COUNCIL OF THE CITY OF FORT COLLINS SUBMITTING PROPOSED CITY-INITIATED ORDINANCE NO. 145, 2004, RELATING TO THE ELIMINATION OF CITY SALES TAX ON GROCERY FOOD TO A VOTE OF THE REGISTERED CITY ELECTORS AT A SPECIAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 2, 2004 WHEREAS, under Article X, Section 1 of the Charter of the City of Fort Collins, the registered electors of the city have the power to propose a measure to the Council, and if the Council fails to adopt a measure so proposed, then to adopt or reject such ordinance or resolution at the polls; and WHEREAS, an initiative petition proposing the elimination of the City's sales tax on grocery food has been submitted to the City; and WHEREAS, the City Clerk has certified said petition as sufficient for submission of the initiated ordinance to a vote of the people at a special municipal election and has presented said petition to the City Council as provided in Article X, Section 5(f)(4) of the City Charter; and WHEREAS, under Article X, Section 1(e) of the City Charter, upon presentation of an initiative petition certified as to sufficiency by the City Clerk, the Council must either adopt the citizen-initiated ordinance without alteration within thirty (30) days or submit said citizen-initiated ordinance in the form petitioned for, to the registered electors of the city; and WHEREAS, the City Council voted unanimously on August 17, 2004 not to adopt the citizen-initiated ordinance because of the severe impact that the measure's passage would have on the delivery of City services to the Fort Collins community; and WHEREAS, when a special election is requested in an initiative petition and the petition has been certified as sufficient, and the Council declines to adopt the measure, the measure must generally be submitted at the next special municipal election to be held within one-hundred twenty days of the Council's consideration of the measure, unless any other regular or special city election is to occur within said period, in which case the initiative measure must be consolidated with such other election; and WHEREAS, notwithstanding the foregoing general rule, Article X, Section 6(e) of the City Charter states that not more than one special election on citizen-initiated measures shall be held in any twelve (12) months; and WHEREAS, since a special election on a citizen-initiated measure has been held by the City on August 10, 2004, the above-referenced initiative petition relating to the reduction of sales tax on grocery food must be referred to the registered electors of the city at the next regular city election on April 5, 2005; and WHEREAS, the above-referenced prohibition against more than one special election within a 12-month period does not apply to Council initiated or referred measures; and WHEREAS, the City's 2005 budget and subsequent budgets may be severely affected by the passage of the proposed elimination of the sales tax on grocery food; and WHEREAS, accordingly, the Council believes it to be in the best interest of the City to place the initiated measure on the November 2, 2004 ballot as a Council initiated measure, so that City voters will approve or deny the measure prior to the 2005 fiscal year; and WHEREAS, the City Council has, on this same date, adopted on First Reading Ordinance No. 144, 2004 calling a special City election to be held in conjunction with the November 2, 2004 Larimer County General Election for the purpose of placing the above-referenced tax elimination measure on the ballot. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That a Special City Election in the City of Fort Collins is hereby called for Tuesday, November 2, 2004, which shall be held in conjunction with the Larimer County General election and conducted in such form as shall be determined by the Larimer County Clerk and Recorder, the following proposed City-initiated Ordinance: CITY-INITIATED ORDINANCE NO. 145, 2004 Whereas, the growth of taxation and regulatory burdens upon the private sector in Fort Collins has exceeded the growth of population plus inflation; and Whereas, said burdens are stunting the orderly development of Fort Collins, especially in comparison to nearby cities; Therefore, be it enacted by the citizens of Fort Collins that “(2.25) percent” in Section 25- 73(d)(1) of the Municipal Code is changed to “(2.25) percent prior to January 1, 2005; (1.5) percent on January 1, 2005; (0.75) percent on January 1, 2006; and (zero) percent on January 1, 2007;” Section 2. That the foregoing proposed city-initiated ordinance is hereby submitted to the registered electors of the City of Fort Collins at said regular municipal election in substantially the following form: CITY-INITIATED ORDINANCE NO. 145, 2004 PROPOSED ORDINANCE An ordinance amending Section 25-73(d)(1) of the Code of the City of Fort Collins to phase in the elimination of the existing 2.25 percent City sales tax on food for domestic home consumption by reducing said sales tax to 1.5 percent on January 1, 2005; 0.75 on January 1, 2006; and zero percent on January 1, 2007. FOR THE ORDINANCE _____ AGAINST THE ORDINANCE _____ Section 3. That this Resolution is expressly contingent upon the petition representatives for the above-referenced citizen-initiated measure executing a written withdrawal of their initiative petition in a form satisfactory to the City Attorney on or before September 17, 2004, and is further contingent upon Council's adoption of Ordinance No. 144, 2004, on Second Reading no later than September 21, 2004. Passed and adopted at a regular meeting of the City Council held this 7th day of September, A.D. 2004. Mayor ATTEST: City Clerk OPTION 2C RESOLUTION 2004-110 OF THE COUNCIL OF THE CITY OF FORT COLLINS SUBMITTING TO THE REGISTERED ELECTORS OF THE CITY A PROPOSED 0.27% INCREASE IN THE CITY'S SALES AND USE TAX RATE TO A VOTE OF THE REGISTERED CITY ELECTORS AT A SPECIAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 2, 2004 WHEREAS, under Article X, Section 1 of the Charter of the City of Fort Collins, the registered electors of the city have the power to propose a measure to the Council, and if the Council fails to adopt a measure so proposed, then to adopt or reject such ordinance or resolution at the polls; and WHEREAS, an initiative petition proposing the elimination of the City's sales tax on grocery food has been submitted to the City; and WHEREAS, the City Clerk has certified said petition as sufficient for submission of the initiated ordinance to a vote of the people at a special municipal election and has presented said petition to the City Council as provided in Article X, Section 5(f)(4) of the City Charter; and WHEREAS, under Article X, Section 1(e) of the City Charter, upon presentation of an initiative petition certified as to sufficiency by the City Clerk, the Council must either adopt the citizen-initiated ordinance without alteration within thirty (30) days or submit said citizen-initiated ordinance in the form petitioned for, to the registered electors of the city; and WHEREAS, the City Council voted unanimously on August 17, 2004 not to adopt the initiated ordinance because of the severe impact that the measure's passage would have on the delivery of City services to the Fort Collins community; and WHEREAS, when a special election is requested in an initiative petition and the petition has been certified as sufficient, and the Council declines to adopt the measure, the measure must generally be submitted at the next special municipal election to be held within one-hundred twenty days of the Council's consideration of the measure, unless any other regular or special city election is to occur within said period, in which case the initiative measure must be consolidated with such other election; and WHEREAS, notwithstanding the foregoing general rule, Article X, Section 6(e) of the City Charter states that not more than one special election on citizen-initiated measures shall be held in any twelve (12) months; and WHEREAS, since a special election on a citizen-initiated measure has been held by the City on August 10, 2004, the above-referenced initiative petition relating to the reduction of sales tax on grocery food must be referred to the registered electors of the city at the next regular city election on April 5, 2005; and WHEREAS, the above-referenced prohibition against more than one special election within a 12-month period does not apply to Council initiated or referred measures; and WHEREAS, the Council has passed on first reading Ordinance No. 144, 2004, calling a special City election to be held in conjunction with the November 2, 2004, Larimer County General Election for the purpose of placing the above-referenced tax elimination of the City's sales tax on grocery food on the ballot, and has adopted Resolution 2004-109 submitting said measure to the registered electors of the City at said election; and WHEREAS, Council believes it to be in the best interest of the City to also submit to the voters at the November 2, 2004, election a 0.27% increase in the rate of the City's sales and use tax on all taxable items except grocery food, to be phased in over three years, the revenues of which tax rate increase would offset the revenues lost by the elimination of the sales tax on food, which new tax rate increase would take effect only if City voters approve the above-referenced citizen-initiated measure to eliminate the City's sales tax on grocery food. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that there is hereby submitted to the registered electors of the City of Fort Collins at a Special City Election to be held in conjunction with the Larimer County General Election on November 2, 2004, the following proposed City-initiated question: CITY-INITIATED MEASURE SHALL CITY OF FORT COLLINS TAXES BE INCREASED BY AN ESTIMATED $6,200,000 OR BY WHATEVER HIGHER OR LOWER AMOUNT MAY BE GENERATED ANNUALLY OR IN THE FINAL FULL FISCAL YEAR BY AN INCREASE OF 0.27% IN THE CITY'S SALES AND USE TAX RATE ON ALL TAXABLE ITEMS EXCEPT GROCERY FOOD, TO BE PHASED IN OVER THREE YEARS AS FOLLOWS: 0.09% ON JANUARY 1, 2005; 0.18% ON JANUARY 1, 2006; AND 0.27% ON JANUARY 1, 2007, WHICH TAX RATE INCREASE WOULD TAKE EFFECT ONLY IF CITY VOTERS APPROVE CITY- INITIATED ORDINANCE NO. 145, 2004, ELIMINATING THE CITY'S SALES TAX ON GROCERY FOOD, WITH ALL REVENUE FROM THIS TAX RATE INCREASE TO BE USED FOR CITY SERVICES, INCLUDING BUT NOT LIMITED TO PUBLIC SAFETY, HEALTH, TRANSPORTATION, CAPITAL PROJECTS, LIBRARIES, PARKS AND RECREATION SERVICES, AND WITH ALL REVENUES FROM THIS TAX RATE INCREASE TO BE COLLECTED AND EXPENDED NOTWITHSTANDING ANY APPLICABLE LIMITATION ON REVENUES AND EXPENDITURES CONTAINED IN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW? YES _________ NO __________ Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 7th day of September, A.D. 2004. __________________________________ Mayor ATTEST: _____________________________ City Clerk AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL ITEM NUMBER: 29 Options 1 and 2 DATE: September 7, 2004 STAFF: Darin Atteberry Steve Roy Wanda Krajicek SUBJECT Items Relating to a Citizen-Initiated Ordinance Proposing the Elimination of the City Sales Tax on Grocery Food. RECOMMENDATION Staff recommends that the proposed citizen-initiated measure which would eliminate the City's sales tax on grocery food be placed on the April 5, 2005 ballot, as required by the City Charter (Option 1). EXECUTIVE SUMMARY Option 1: A. Resolution 2004-101 Submitting Proposed Citizen-Initiated Ordinance No. 002, 2004, Relating to the Elimination of Sales Tax on Grocery Food to a Vote of the Registered City Electors at the Next Regular Municipal Election on April 5, 2005. OR Option 2: A. First Reading of Ordinance No. 144, 2004, Calling a Special Municipal Election to Be Held in Conjunction with the November 2, 2004 Larimer County General Election. B. Resolution 2004-109 Submitting Proposed City-Initiated Ordinance No. 145, 2004, Relating to the Elimination of City Sales Tax on Grocery Food to a Vote of the Registered City Electors at a Special Municipal Election to be Held on November 2, 2004. C. Resolution 2004-110 Submitting a Proposed 0.27% Increase in the City's Sales and Use Tax Rate to a Vote of the Registered City Electors at a Special Municipal Election to be Held on November 2, 2004. This item proposes two options for placing a citizen-initiated measure to eliminate the sales tax on grocery food on the ballot. Option 1 would place the item on the regular municipal election ballot September 7, 2004 -2- Item No. 29 (Options 1 & 2) on April 5, 2005 as a citizen-initiated measure. Option 2 would place the item on the November 2, 2004 ballot as a Council-initiated measure. In addition, pursuant to Council direction at the August 17, 2004 meeting, staff has prepared another measure which could be placed on the November 2, 2004 ballot proposing a 0.27% increase in the City's sales and use tax rate on all taxable items except food. The purpose of this measure would be to offset the revenues that would be lost if the sales tax was removed from grocery food. This new tax would take effect only if voters approve the elimination of the sales tax on grocery food. BACKGROUND The City Clerk’s Office has certified a sufficient number of signatures on an initiative petition received on July 19, 2004. Under Article X of the City Charter, 3,902 signatures of registered electors (at least 15% of the total ballots cast in the last regular City election) are required to place an initiative on a special election ballot. Upon presentation of an initiative petition certified as to sufficiency by the City Clerk, the Council must either adopt the proposed ordinance without alteration or submit the proposed measure in the form petitioned for, to the registered electors of the city. At its meeting on August 17, 2004, the Council voted unanimously to not adopt the initiated ordinance because of the severe, detrimental impacts that passage of the measure would have on City revenues and services. Therefore, the Council must refer this measure to the ballot. Article X, Section 1 of the City Charter normally requires that, if a petition requests a special election (which this petition does), the Council must call a special election to be held on a Tuesday within 120 days of the presentation of the certified petition to the Council. However, another section of the City Charter (Article X, Section 6(e)), states that not more than one special election on citizen-initiated measures may be held within any 12 month period. Because a special City election has just been held on August 10, 2004, any new citizen-initiated measure must be placed on the April, 2005 ballot. At the August 17, 2004 Council meeting, the petition representatives requested that Council consider placing this measure on the November ballot as a Council-initiated measure because the Charter provision which prohibits more than two special elections within a 12-month period does not apply to measures initiated or referred by the City Council. In order to further consider this request, the Council chose to postpone the Resolution placing the measure on the April ballot and directed the City Attorney to prepare an alternative resolution, together with an ordinance calling a special election to be held in conjunction with the November 2, 2004 General Election, which would enable the Council to place this measure on the November ballot as a Council-initiated measure. Additionally, the Council directed City staff to prepare a tax measure that could be considered by the voters at the same time as the measure that would eliminate the sales tax on grocery food. This additional measure would increase the tax on taxable items other than grocery food if the initiated measure was adopted by the voters, and it would increase that tax rate incrementally to the extent necessary to offset the loss in revenues that the City would otherwise experience from the elimination of the base tax on grocery food. Option 2 would place this measure on the November ballot, along with the proposed elimination of the sales tax on grocery food. September 7, 2004 -3- Item No. 29 (Options 1 & 2) In anticipation of the possibility that the initiated measure eliminating the tax on grocery food will be placed on the November ballot, the petition representatives agreed at the August 17, 2004, Council meeting that the voters' consideration of the measure in November would alleviate the need to place the matter before the voters again in April, 2005, regardless of the outcome of the vote in November. Therefore, the Resolution placing the initiated measure on the November ballot is contingent upon the petition representatives' execution of a written form withdrawing their citizen initiative if the measure they have proposed is submitted to the electors as a Council-initiated measure on November 2, 2004. Staff is recommending that the measure proposing the elimination of the sales tax on grocery food be placed on the April 5, 2005 ballot as a citizen-initiated measure. Staff is making this recommendation because, following the August 17, 2004, meeting, staff learned that there is a covenant contained in a 2003 sales and use tax revenue bond ordinance which, in effect, prohibits the repeal or amendment of any portion of the City Code provisions establishing the City's sales and use tax if such action would diminish the City's sales and use tax revenues, since those revenues are pledged to the payment of the sales and use tax bonds. This prohibition remains in place until the bonds are paid in full, which is presently scheduled to occur on December 1, 2009. Therefore, staff believes that Council should not place the proposed elimination of the sales tax on food on the ballot as a Council-initiated measure since that measure, if approved by the voters, would violate the covenant in the 2003 bond ordinance.