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
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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Section 2: All ordinances and parts thereof in conflict herewith are hereby repealed to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
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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