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HomeMy WebLinkAboutOrdinance 5428 i 1111111 111111 iii 11111 11111 11111 11111 11111 11111 11111 11111 11111 11111 11111 ilii ilii Doc ID: 014176310002 Type: REL Kind: ORDINANCE Recorded: 08/26/2011 at 02:37:17 PM Fee Amt: $20.00 Paae 1 of 2 Washington Countv. AR Bette Stamps Circuit Clerk File2011-00024172 I c i C5r U,- co ORDINANCE NO. 5428 1 r AN ORDINANCE PROVIDING FOR THE LEVY OF A ONE PAF&T tf SALES AND USE TAX WITHIN THE CITY OF FAYETTEVIELE, ARKANSAS TO REPLACE THE EXPIRING ONE PERCENT SALES AND USE TAX; PROVIDING FOR AN EXPIRATION DATE FOR SUCH SALES AND USE TAX OF JUNE 30, 2023 AND PRESCRIBING OTHER MATTERS PERTAINING THERETO WHEREAS, the City Council of the City of Fayetteville, Arkansas has determined that there is a great need for the continuing operation and improvement of municipal services, for capital improvements and for a source of revenue to finance such services and improvements; and WHEREAS, Title 26, Chapter 75, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation") provides for the levy of a one percent (1%) city-wide sales and use tax. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,ARKANSAS: Section 1: Under the authority of the Authorizing Legislation, there is hereby levied a one percent(1%)tax on the gross receipts from the sale at retail within the City of Fayetteville of all items which are subject to the Arkansas Gross Receipts Tax Act of 1941, as amended (A.C.A. §26-52-101, et seq.) and the imposition of an excise (or use) tax on the storage, use, distribution or other consumption within the City of tangible personal property subject to the Arkansas Compensating Tax Act of 1949, as amended (A.C.A. §26-53-101, et seq.), at a rate of one percent (1%) of the sale price of the property or, in the case of leases or rentals, of the lease or rental price (collectively, the"Sales and Use Tax"). Section 2: All ordinances and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Page 2 Ordinance No. 5428 Section 3: This Ordinance shall not take effect until an election is held on the question of levying the Sales and Use tax at which a majority of the electors voting on the question shall have approved the levy of the Sales and Use Tax and then only upon the expiration of the currently authorized one percent (1%) Sales and Use Tax passed by the Fayetteville voters on July 23, 2002, and set to expire on June 30, 2013. PASSED and APPROVED this 2°a day of August, 2011. APPROVED: ATTEST: By: By: 4�7'�4.z L LD J AN, Mayor SO RA E. SMITH, City Clerk/Treasurer 919911111// TR E:q a�G Y ;FAYETfEVILLE; 000 ° O • s GTO� °°AeaaeaAllse►�` Washington County, AR I certify this instrument was filed on 08/26/2011 02:37:17 PM and recorded in Real Estate File Number 2011-00024172 Bette Stamps Circuit Clerk City of Fayetteville Staff Review Form City Council Agenda Items and Contracts, Leases or Agreements August 2,2011 City Council Meeting Date Agenda Items Only Paul A. Becker Finance and Internal services Finance Submitted By Division Department Action Required: This is a request that the City Council approve a one percent Sales and Use Tax to replace the expiring Sales and Use Tax.The ordinance is providing for a continuation of that tax until June 30,2023. N/A $ - Cost of this request Category/Project Budget Program Category/Project Name Account Number Funds Used to Date Program/Project Category Name Project Number Remaining Balance Fund Name Budgeted Item Budget Adjustment Attached Previous Ordinance or Resolution# Department Director Date a� Original Contract Date: Za t i Original Contract Number: City Attorney Date 4aJ ()A, 77-0-wlt 07-18-1 1 P03:02 RC D Finance and Internal Services Director Date Received in City Clerk's Office AA— LGl Chi4ofSt Date Received inMayor's Office yD6te Comments: Revised January 15,2009 • a e eVl e THE CITY OF FA T ENTCO,ARKANSAS DEPARTMENT CORRESPONDENCE ARKANSAS . . CITY COUNCIL AGENDA MEMO To: Mayor Jordan and Members of the Fayetteville City Council Thru: Don Marr, Chief of Staff From: Paul A Becker, Finance Director Date: 7/15/25011 Subject: Request for an Ordinance continuing the one percent city sales and use tax and providing for a Special Election called for that purpose on October 11, 2011. A budget amendment is also requested to provide for costs of an election. Background: As you are all aware, the Arkansas Statutes provide enabling legislation for a levy of a one percent City-Wide Sales and Use Tax if approved by the voters. In 2002 the citizens of Fayetteville elected to continue the one percent City-Wide Sales Tax which was then scheduled to expire in June, 2003. The Sales Tax will continue until June, 2013 pursuant to the authorizing ordinance voted on. As we approach 2013, it is extremely important that adequate lead time be provided for consideration of the request for continuation of this tax. It is also important that the citizens consider the continuation of this tax before they are presented with any request for new Sales Taxes proposed by other jurisdictions. The continuation of this Sales Tax must again be authorized by the voter and the administration is, therefore, requesting a special election for that purpose be held on October 11, 2011. There was no provision in the 2011 budget for the cost of this election so a budget amendment to cover the necessary costs is also being requested. Issues• As your Chief Financial Officer it is my responsibility to identify issues and potential ramifications associated with the loss of the City-Sales Tax revenue if not continued via voter approval. I will try to do this as simply and clearly as possible. The City collects approximately $15,400,000 annually from the City-Wide Sales and Use Tax.That amount is split in a 60-40 ratio between General Fund Operations and General Capital Improvements respectively. In dollars this is $9,240,000 for operations and $6,160,000 for Capital. In percentage terms that is 27.6% of the General Fund Revenue and 100% of the General Fund Capital Improvement Program. A revenue loss of that magnitude could not be made by other sources. It is also important to note that other revenue sources are currently experiencing downward pressures in the short run. Therefore; we would have to cut expenses and related services dramatically. The General Capital Program would disappear. THE CITY OF FAYETTEVILLE,ARKANSAS A quick review of the General Fund Expenditure Budget will indicate that 82% of that budget is for personnel services. That is approximately $27,500,000. If we cut each category in the budget in direct proportion to the revenue loss (27.6%)the personnel services category would have to be reduced by about$7,600,000. There are 455 authorized positions in the General Fund. Twenty-seven and one half percent of authorized positions is 125 but the loss of jobs in number would be larger than that and could be as many as 150. Since Public Safety is about 60% of the numerical total, that could mean 90 job reductions in that sector alone. The General Capital Improvement Program funds many important programs such as: The Street Paving Program The Trail Program Drainage Programs Library Materials City Capital and Equipment Replacement Program IT Programs Amounts currently provided from the Sales Tax Capital Fund for these programs would be eliminated. The current amount funded is $6,160,000 per year. Summary : The above discussion should not be construed as a plan of action if the Sales and Use Taxes are not continued. However, I believe that the facts shown above indicate both the magnitude and potential service reductions that the loss of the City's largest single revenue producing tax would cause. The citizens of Fayetteville have shown themselves to be thoughtful and intelligent voters and I am confident that after being shown the facts they will overwhelmingly vote to continue this tax which provides funding for many vital programs. BUDGET IMPACT: The cost of the requested special election is estimated to be $20,000 and a budget amendment for that amount is attached. ORDINANCE NO. AN ORDINANCE PROVIDING FOR THE LEVY OF A ONE PERCENT SALES AND USE TAX WITHIN THE CITY OF FAYETTEVILLE, ARKANSAS; TO REPLACE THE EXPIRING ONE PERCENT SALES AND USE TAX; PROVIDING FOR AN EXPIRATION DATE FOR SUCH SALES AND USE TAX OF JUNE 30, 2023 AND PRESCRIBING OTHER MATTERS PERTAINING THERETO WHEREAS, the City Council of the City of Fayetteville, Arkansas has determined that there is a great need for the continuing operation and improvement of municipal services, for capital improvements and for a source of revenue to finance such services and improvements; and WHEREAS, Title 26, Chapter 75, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation") provides for the levy of a one percent (1%) city-wide sales and use tax. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,ARKANSAS: Section 1: Under the authority of the Authorizing Legislation, there is hereby levied a one percent(1%)tax on the gross receipts from the sale at retail within the City of Fayetteville of all items which are subject to the Arkansas Gross Receipts Tax Act of 1941, as amended(A.C.A. §26-52-101, et seq.) and the imposition of an excise (or use) tax on the storage, use, distribution or other consumption within the City of tangible personal property subject to the Arkansas Compensating Tax Act of 1949, as amended (A.C.A. §26-53-101, et seq.), at a rate of one percent (1%) of the sale price of the property or, in the case of leases or rentals, of the lease or rental price (collectively, the "Sales and Use Tax"). Section 2: All ordinances and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 3: This Ordinance shall not take effect until an election is held on the question of levying the Sales and Use tax at which a majority of the electors voting on the question shall have approved the levy of the Sales and Use Tax and then only upon the expiration of the currently authorized one percent (1%) Sales and Use Tax passed by the Fayetteville voters on July 23, 2002, and set to expire on June 30, 2013. PASSED and APPROVED this 2nd day of August,2011. APPROVED: ATTEST: By: BY: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer a jjTT• a e e 1 1 a Departmental Correspondence ARKANSAS LEGAL www.accessfayetteville.org DEPARTMENT Kit Williams TO: Mayor Jordan City Attorney City Council Jason B.Kelley Assistant City Attorney CC: Don Marr, Chief of Staff Paul Becker, Finance Director FROM: Kit Williams, City Attorney �-' — DATE: July 27, 2011 RE: Renewal of Penny Sales Tax If the City Council passes the renewal of the penny sales tax and refers it to the voters, office holders and city employees will need to know what they can and cannot do relative to this sales tax election. This is not the first time the City has proposed a sales tax and referred it to the vote of our citizens, nor the first time I have been asked to discuss the legal parameters for city officials and employees who might want to support (or oppose) the sales tax. Please see my attached memo of January 28, 2010. CONCLUSION I believe the City of Fayetteville has the right, if not the duty, to provide nonpartisan, fair education about ballot issues: Parks HMR amendment, sales tax proposals, etc. I recommend that the City not stray into advocacy which will trigger reporting requirements at the least. Elected officials such as the Mayor and all Aldermen may advocate personally on any ballot issue. They may also use educational exhibits or documents prepared by city employees during their advocacy activities. Advocacy activities should normally be done offsite or in a location where opposing views are traditionally allowed (City Council Chambers during a meeting, but not in the Mayor's Office). I do not recommend any campaign events be filmed or shown on the Government Channel. True news conferences and public meetings where opposition speakers are afforded an opportunity to speak could be okay. City employees have the First Amendment right to advocate for or against the sales tax on their own time, but must refrain from any advocacy while on the job, in city uniform, or while claiming to represent the City. _U tITYOF FAY ETTEVILLE,ARKANEWLLE SAS KIT WILLIAMS,CITY ATTORNEY DAVID WHITAKER,ASST.CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE I,IJ;A.I., DEPART,`,] ?,�t.f TO: Don Marr, Chief of Staff FROM: Kit Williams, City Attorney < - - _. DATE: January 28, 2010. RE: Restrictions on political activity to support amendment to Parks HMR tax usage ordinance I could not find any previous memos I had prepared concerning what city officials could and could not do in support of a referendum on an initiative submitted to the voters. I know that I redrafted a water bill insert that had been drafted by Mayor Coody's administration concerning the reauthorization of the penny sales tax in 2002. My redraft was an attempt to make the insert more educational and nonpartisan rather than clear advocacy of the renewal of the penny tax. A.C.A. §7-1-103(a)(2) clearly prohibits any public servant "to devote any time or labor during usual office hours toward the campaign of any other candidate for office ...." I could find no similar prohibition for a campaign. for an initiated or referred question. Indeed, Arkansas law expressly recognizes that state appropriated funds ma be used by a state agency, board or commission "for the purpose of o o i y supporting any initiative, referendum ...." ppsing or This all such use of appropriated funds to be reported to hLegislative C e Le o law requires g unci]. If appropriated funds (even on the municipal level) are used in an attempt to oppose or support a referred ordinance's election, then the group or entity doing so would probably be characterized as a "ballot question committee" which would have to file financial reports with the State Ethics Committee if$500 or more was spent. A.C.A. §7-9-406 (c) states: "A public servant or governmental body expending public funds in excess of five hundred dollars ($500.00) for the purpose of expressly advocating the ...passage or defeat of a ballot question ... shall file with the commission financial reports as required by §7-9-409.91) CONCLUSION I believe the City of Fayetteville has the right, if not the duty, to provide nonpartisan, fair education about ballot issues: Parks HMR amendment, sales tax proposals, etc. I recommend that the City not stray into advocacy which will trigger reporting requirements at the least. Elected officials such as the Mayor and all Aldermen may advocate personally on any ballot issue. They may also use educational exhibits or documents prepared by city employees during their advocacy activities. Advocacy activities should normally be done offsite or in a location where opposing views are traditionally allowed (City Council Chambers during a meeting, but not in the Mayor's Office). I would like to review any educational insert proposed for insertion into the water bills to try to ensure its objectivity and fairness (and lack of advocacy). I do not recommend any campaign events be filmed or shown on the Government Channel. True news conferences and public meetings where opposition speakers are afforded an opportunity to speak could be okay. aye evale Sales Tax Referendum