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Home My WebLink About136-11 RESOLUTIONRESOLUTION NO. 136-11 A RESOLUTION TO APPROVE A BUDGET ADJUSTMENT IN THE AMOUNT OF $20,000.00 TO PAY FOR A SPECIAL ELECTION TO SEEK RENEWAL OF THE CITY'S ONE CENT SALES AND USE TAX USED FOR OPERATIONS AND CAPITAL EXPENDITURES WHEREAS, if the City Council passes an Ordinance calling for a Special Election on October 11, 2011, to submit to the Fayetteville electors the question of renewing the City's one cent sale and use tax, the City will incur an expense of approximately $20,000.00 payable to the Washington County Election Commission. NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves the attached budget adjustment in the amount of $20,000.00 to pay for a special election to seek renewal of the city's one cent sale and use tax used for operations and capital expenditures. PASSED and APPROVED this 2nd day of August, 2011. APPROVED: B ELD J t I ) AN, Mayor By: ATTEST: SONDRA E. SMITH, City Clerk/Treasurer Paul A. Becker Submitted By 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 Finance and Internal services Division Action Required: Finance Department The Administration has requested that the City Council call a special election on October 11,2011 to consider the continuation of the City -Wide Sales and Use Tax.This request is to approve a budget ammendment for $20,000 to pay for the estimated costs of that election. N/A Cost of this request Account Number Project Number "'Budgeted Item Category / Project Budget Services and Charges Program Category / Project Name Miscellaneous Funds Used to Date Program / Project Category Name General Remaining Balance Fund Name Budget Adjustment Attached x Department Director City A Finance and Internal Services Director DO,K. 7- 1 ,z6 it Previous Ordinance or Resolution # Date �f a Original Contract Date: tl - 24i J Original Contract Number: Date •7-% -1.611 Date 17-1941 Date 6ZP4 Date 7-19-1 1 P01 :30 R C V D Clerk's Office I Received in Mayor's Office go ER Comments: Revised January 15, 2009 a�'ltve eville THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENT CORRESPONDENCE ARKANSAS www.accessfayetteville.org 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. RESOLUTION NO. A RESOLUTION TO APPROVE A BUDGET ADJUSTMENT IN THE AMOUNT OF $20,000.00 TO PAY FOR A SPECIAL ELECTION TO SEEK RENEWAL OF THE CITY'S ONE CENT SALES AND USE TAX USED FOR OPERATIONS AND CAPITAL EXPENDITURES WHEREAS, if the City Council passes an Ordinance calling for a Special Election on October 11, 2011, to submit to the Fayetteville electors the question of renewing the City's one cent sale and use tax, the City will incur an expense of approximately $20,000.00 payable to the Washington County Election Commission. NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves the attached budget adjustment in the amount of $20,000.00 to pay for a special election to seek renewal of the city's one cent sale and use tax used for operations and capital expenditures. PASSED and APPROVED this 2nd day of August, 2011. APPROVED: ATTEST: By: By: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer City of Fayetteville, Arkansas Budget Adjustment Form V11.0425 Budget Year 2011 Division: Miscellaneous Department: Mayors Administration Request Date 8/2/2011 Adjustment Number BUDGET ADJUSTMENT DESCRIPTION / JUSTIFICATION Funds are needed for a special election for re -approval of the one percent sales tax. Division Head Date B dget Director Department Director ---/Tis Date 1-12-2,611 Date Fina a Director Chief ...-%a f i �A4 �M:yor Account Name Date Date Prepared By: BARBARA FELL Reference: BARBARA FELL Budget & Research Use Only Type: A B C E General Ledger Date Posted to General Ledger Checked / Verified TOTAL BUDGET ADJUSTMENT Account Number Initial Date Initial Date Increase / (Decrease) Project.Sub Expense Revenue Number Election cost Use of fund balance 1010.6600.5318.00 20,000 1010.0001.4999.99 (20,000) H:\Budget\Budget Adjustments\2011 Budget\Barbara\Sales Tax Special Election 1 of 1