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HomeMy WebLinkAbout2005-009-02/01/2005-EXPRESSING THE CITY COUNCIL'S OPPOSITION TO THE CITIZEN INITIATED BALLOT MEASURE WHICH WOULD REPEAL RESOLUTION 2005-009 OF THE COUNCIL OF THE CITY OF FORT COLLINS EXPRESSING THE CITY COUNCIL'S OPPOSITION TO THE CITIZEN INITIATED BALLOT MEASURE WHICH WOULD REPEAL THE CITY'S SALES TAX ON GROCERY FOOD WHEREAS, as a home rule city, the City of Fort Collins is authorized by law to generate revenue through taxes, fees, special assessments and other funding mechanisms; and WHEREAS,the City,like other home rule municipalities in Colorado,depends heavily upon the revenue generated by its sales and use taxes in order to provide a wide variety of governmental services and facilities that are essential to the health, safety and welfare of its citizenry; and WHEREAS,historically,the City has used its revenue sources judiciously and has developed infrastructure and services that have provided the residents of the City of Fort Collins with a safe, vibrant, economically viable, and attractive community in which to live, work and raise their families, as well as a quality of life that has been nationally recognized for its excellence; and WHEREAS, the City's current "base" sales tax of 2.25% is the cornerstone of the City's revenue stream; and WHEREAS, this base sales tax is imposed on all taxable items sold in the City, including grocery food; and WHEREAS,a citizen initiated measure(the"Ballot Measure")has been proposed and placed on the ballot at the next regular City election on April 5, 2005 which, if approved by the voters would, over time, entirely repeal the City's sales tax on grocery food; and WHEREAS, once fully implemented, the repeal of the sales tax on grocery food would reduce City revenues by approximately six million dollars per year which represents 12.6% of the City's General Fund budget; and WHEREAS, this reduction in revenue would compound recent revenue shortfalls experienced by the City as a result of a downturn in the economy; and WHEREAS,these revenue shortfalls have already reduced the City's general fund operating budget by approximately six million dollars per year, making the delivery of ongoing City services more difficult; and WHEREAS, the additional reduction in revenues that would result from voter approval of the Ballot Measure would necessitate drastic reductions in City services that would adversely affect the health, safety, welfare and quality of life of all City residents and would jeopardize the City's ability to maintain the level of governmental services that have made Fort Collins an exceptional place to live and work; and WHEREAS,the City Council Finance Committee,working with the City Manager and other members of City staff,has identified four cost reduction scenarios that it believes may be necessary if the Ballot Measure is approved by the voters; and WHEREAS, in the opinion of the City Attorney, the approval and implementation of the Ballot Measure would violate a covenant that is contained in a 2003 bond ordinance approved by the City council in connection with the refunding of certain sales and use tax bonds, in which the City promised not to reduce the sales tax revenues pledged to the payment of the bonds, and such action would unconstitutionally impair the contract thereby established between the City and its bondholders; and WHEREAS,the repeal of the City's sales tax on grocery food would serve no useful purpose for low income residents of the City, since the City already has in place a sales tax rebate program which makes it possible for low income residents to obtain a full rebate of the sales tax they pay on grocery food; and WHEREAS, the proponents of the Ballot Measure have publicly acknowledged that the purpose of the measure is to reduce the size of City government which will, in turn, reduce the number and quality of services provided by the City; and WHEREAS, the City Council strongly believes that such reduction in services is not in the best interests of the City, and wishes to urge the electors of the City to vote against the Ballot Measure; and WHEREAS, the Council Finance Committee has, after thorough review of the Ballot Measure and its potential impacts on the provision of City services, recommended that the City Council adopt a resolution opposing the Ballot Measure, as permitted by law. NOW, THEREFORE, BE 1T RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that,for the foregoing reasons,the City Council strongly opposes the proposed repeal of the City's sales tax on grocery food and urges the registered electors of the City to vote against the Ballot Measure. Passed and adopted at a regular meeting of the Council of the Citypf Fort Collins held this 1st day of February, A.D. 2005. Mayor �"—N I .k City Clerk