HomeMy WebLinkAboutITEM IV-H
*
C TY OF_
AIU'BU~ AGENDA BILL APPROVAL FORM
WASHWGTON
Agenda Subject: Date:
Ordinance No. 6301 March 11, 2010
Department: Attachments: Budget Impact: $250,000.00
Finance Ordinance No. 6301 a ear for 25 ears
Administrative Recommendation:.
Cit Council to ado t Ordinance No. 6301
Background Summary:
Ordinance No. 6301 levies the .03% sales tax credit against the state sales tax for local revitalization
financing. SB 5045 authorizing the tax credit was passed by the state legislature during the 2009 regular
session. The intent of the legislation was to provide financial assistance to Cities to assist with financing
public improvements in an identified revitalization area to promote community and economic
development.
The City applied for the use of local revitalization financing on August 11, 2009 and the Department of
Revenue approved the application on September 16, 2009 granting the project award of $250,00.00. The
tax credit is available to the City for up to 25 years.
Reviewed by Council & Committees: Reviewed by Departments & Divisions:
❑ Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O
❑ Airport E Finance ❑ Cemetery ❑ Mayor
❑ Hearing Examiner ❑ Municipal Serv. 0 Finance ❑ Parks
❑ Human Services ❑ Planning & CD ❑ Fire ❑ Planning ❑ Park Board ❑Public Works ❑ Legal ❑ Police
❑ Planning Comm. ❑ Other ❑ Public Works ❑ Human Resources
❑ Information Services
Action:
CommitteeApproval: ❑Yes ❑No
Council Approval: ❑Yes ❑NO Call for Public Hearing
Referred to Until
Tabled Until__/_/_
_
Councilmember: Backus Staff: Coleman
Meetin Date: March 15, 2010 Item Number:
AUBURN * MORE THAN YOU IMAGINED
ORDINANCE NO. 6 3 0 1
AN ORDINANCE OF THE CITY OF AUBURN,
WASHINGTON IMPOSING THE LOCAL SALES AND USE
TAX TO BE CREDITED AGAINST THE STATE SALES AND
USE TAX FOR PURPOSES OF UTILIZING LOCAL
REVITALIZATION FINANCING UNDER CHAPTER 39.104
RCW; AND PROVIDING FOR OTHER MATTERS
PROPERLY RELATING THERETO.
THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON DOES ORAIN
as follows:
Section 1. Definitions. Capitalized terms not othervvise defined in this ordinance
have the meanings given in RCW 39.104.020, as it may be amended from time to time.
Section 2. Findings. The City Council (the "Council") of the City of Auburn,
Washington (the "City"), hereby makes the following findings and determinations:
2.1 Chapter 39.104 RCW and RCW 82.14.505 and 82.14.510 authorize the
imposition of a local sales and use tax (the "LRF Tax") for the purpose of financing certain
Public Improvements located within a Revitalization Area ("RA"), upon the satisfaction of
certain conditions set forth therein. This local sales and use tax is credited against the
sales and use tax otherwise due to the State under chapters 82.08 and 82.12, resulting in
no net change in tax rate to the taxpayer.
2.2 Pursuant to this authority, the City, by Resolution No. 4502, adopted on
August 3, 2009, previously created the Auburn Revitalization Area, for the purpose of
financing Public Improvements located within the RA.
2.3 The City submitted its application for the use of Local Revitalization
Financing pursuant to RCW 39.104.100 and 82.14.505 on August 11, 2009, and the
Department of Revenue (the "DepartmenY") approved such application on September 16,
2009, granting a project award in the amount of $250,000.
2.4 The City Council finds that the City has satisfied all prerequisites to imposing
the LRF Tax and receiving the State Contribution, including without limitation, the
conditions set forth in chapter 39.104, RCW 82.32.765, 82.14.505, 82.14.510 and
82.14.515.
- 2.5 Prior to July 1, 2010, the City intends to incur general indebtedness, and to
issue bonds, pursuant to RCW 39.104.110 in a maximum principal amount not to exceed
$7,200,000 to finance the Public Improvements. The City further intends to retire such
indebtedness in whole or in part from Local Revitalization Financing it receives.
Section 3. State-Shared Sales and Use Tax Imposed as of July 1, 2010. The
sales and use tax authorized under RCW 82.14.510 is imposed as of July 1, 2010, as
follows:
3.1 Effective Date and Duration. The sales and use tax authorized by this
ordinance shall be imposed and become effective as of July 1, 2010. The tax imposed
under this ordinance expires the earlier of the date that the bonds issued under the
authority of RCW 39.104.110 are retired or July 1, 2035, the date that is twenty-five years
after the tax is first imposed.
3.2 Rate. The tax rate shall initially be set at .03% of the selling price (in the
case of a sales tax) or value of the article used (in the case of a use tax). The tax rate may
be adjusted by ordinance of the City Council from time to time so that it is set at the rate
reasonably necessary to receive the state contribution over ten months, in accordance
with RCW 82.14.510(3).
3.3 Use of LRF Tax Receipts. In accordance with RCW 82.14.515, receipts of
the LRF Tax shall be applied to provide for the payment of debt service on bonds issued
under RCW 39.104.110.
3.4 Other Statutorv Requirements.
(1) In accordance with RCW 82.14.510(6):
(a) The LRF Tax authorized by this ordinance shall first be imposed on
July 1, 2010, which is the first day of a State fiscal year.
(b) The cumulative amount of LRF Tax distributions received by the City in
any fiscal year shall not exceed the amount of the State Contribution to
the City.
(c) The LRF Tax shall cease to be distributed to the City for the remainder of
any State fiscal year in which:
(i) The amount of tax received by the City equals the amount of the
State Contribution; or
(ii) The amount of revenue distributions to all Sponsoring and
Cosponsoring Local Governments from taxes imposed under RCW
82.14.510 equals the Annual State Contribution Limit.
(2) The LRF Tax shall be distributed again, should it cease to be distributed for
any of the reasons provided in RCW 82.14.510(6)(c), at the beginning of the next State
fiscal year, subject to the restrictions in RCW 82.14.510.
(3) Any revenue generated by the LRF Tax in excess of the amounts specified
in (1)(c) of this subsection 3.4 shall belong to the State of Washington.
(4) In accordance with RCW 82.14.510(9), if the City fails to comply with
RCW 82.32.765, no tax will be distributed in the subsequent fiscal year until such time as
the City complies and the department calculates the State Contribution amount for such
fiscal year in accordance with RCW 82.14.510(10).
Section 4. Delivery of Ordinance. The City Clerk is directed to cause a certified
copy of this ordinance to be delivered to the State of Washington Department of Revenue
and any other public officers or agencies required by law.
Section 5. Ratification. All actions heretofore taken in furtherance thereof and
not inconsistent with the provisions of this ordinance are hereby ratified and confirmed in
all respects.
Section 6. Validity. If any provision of this ordinance shall be declared by any
court of competent jurisdiction to be invalid, then such provision shall be nuil and void and
shall be separable from the remaining provisions of this ordinance and shall in no way
affect the validity of the other provisions of this ordinance, of any bonds issued in
anticipation of receipt of distributions from LRF Taxes or of the use of Local Revitalization
Financing to finance the Public Improvements.
PASSED BY THE CITY COUNCIL OF THE CITY OF
WASHINGTON, this _ day of , 2010.
CITY OF , WASHINGTON
Mayor
Attest:
Danielle Daskam, City Clerk
Approved as to form:
Daniel B. Heid Citv Attornev