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HomeMy WebLinkAbout09110 ORDINANCE NO. 9110 AN ORDINANCE APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PUEBLO COUNTY, COLORADO, A POLITICAL SUBDIVISION OF THE STATE OF COLORADO RELATING TO THE SHARING OF TAX REVENUE GENERATED BY PUEBLO COUNTY’S SPECIAL TAX ON THE SALE OF RETAIL MARIJUANA AND RETAIL MARIJUANA PRODUCTS IN THE CITY OF PUEBLO BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Intergovernmental Agreement dated March 27, 2017 between Pueblo, a municipal corporation and Pueblo County, Colorado, a political subdivision of the State of Colorado relating to the sharing of tax revenue generated by Pueblo County’s three and one-half percent (3.5%) special tax on the sale of retail marijuana and retail marijuana products in the City of Pueblo (“IGA”), having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the IGA in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 2. The officers and staff of the City are directed and authorized to perform any and all acts consistent with the intent of this Ordinance and the attached IGA which are necessary or desirable to implement the transactions described therein. SECTION 3. This Ordinance shall become effective immediately upon final passage. INTRODUCED March 13, 2017 BY: Ed Brown PASSED AND APPROVED: March 27, 2017 City Clerk’s Office Item # R-7 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: March 13, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND PUEBLO COUNTY, COLORADO, A POLITICAL SUBDIVISION OF THE STATE OF COLORADO RELATING TO THE SHARING OF TAX REVENUE GENERATED BY PUEBLO COUNTY’S SPECIAL TAX ON THE SALE OF RETAIL MARIJUANA AND RETAIL MARIJUANA PRODUCTS IN THE CITY OF PUEBLO SUMMARY: Attached is an Ordinance which approves an Intergovernmental Agreement (“IGA”) between the City of Pueblo and Pueblo County pertaining to the sharing of revenue from Pueblo County’s three . and one-half percent (35%) special tax on the sale of retail marijuana and retail marijuana products. PREVIOUS COUNCIL ACTION: Not applicable to this Ordinance. BACKGROUND: The voters of Pueblo County approved a ballot issue at the 2013 coordinated General Election which approved a three and one-half percent (3.5%) special tax on the sale of retail marijuana and retail marijuana products in all portions of Pueblo County. No retail marijuana stores have operated within the City of Pueblo in the time since the tax was imposed. However, the City expects eight (8) retail marijuana stores to open in the City in the coming months. The City and County agree that it is in the best interests of the citizens of Pueblo County and the City of Pueblo to allow the City to receive a portion of the revenue from the special sales tax which is collected within the City limits. FINANCIAL IMPLICATIONS: The City and County agree that the City shall receive 85% of all revenues collected within the City limits from the special marijuana sales tax. The parties also agree that the County, as a reimbursement of its administrative costs, shall retain 15% of all revenues from the special sales tax collected within the boundaries of the City. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Ordinance. STAKEHOLDER PROCESS: Not applicable to this Ordinance. ALTERNATIVES: The City could request voter approval of a City special tax on the sale of retail marijuana and retail marijuana products within City limits. RECOMMENDATION: Approval of the Ordinance. Attachments: Proposed Ordinance and proposed IGA INTERGOVERNMENTAL AGREEMENT THIS AGREEMENT is entered into and is effective this 27th day of March,2017 ("Effective Date"), between Pueblo County, a political subdivision of the State of Colorado, ("County") and the City of Pueblo, a municipal corporation, ("City") (collectively, the "Parties"). WITNESSED: WHEREAS,by Resolution No. 13-186,the Pueblo County Board of County Commissioners referred a ballot issue to the voters seeking approval of a special tax on the sale of retail marijuana and retail marijuana products in all portions of Pueblo County; and WHEREAS, the voters of Pueblo County approved the ballot issue at the 2013 coordinated general election; and WHEREAS, the County has been collecting the tax within unincorporated portions of the County since 2014; and WHEREAS, no retail marijuana stores have operated within the City in the time since the tax was imposed, but the City expects up to eight stores to open in the coming months; and WHEREAS, the Parties agree that it is in the best interests of the citizens of Pueblo County and the City of Pueblo to allow the City to receive a portion of the revenue from the special sales tax collected within its boundaries. NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises contained herein, the sufficiency of which is hereby acknowledged, the parties agree as follows: I. GENERAL MATTERS: A. Purpose: The purpose of this Agreement is to allow for the sharing of tax revenue between the City and the County. B. Tax Subject to this Agreement: The tax that is the subject of the agreement is the special sales tax including applicable penalties and interest on the sale of retail marijuana and retail marijuana products occurring within the City limits and levied, collected and enforced in accordance with Resolution No. 13-186 (hereinafter, the "Tax"). II. OBLIGATIONS OF THE PARTIES: A. Except as otherwise provided in this Section, the County agrees that the City shall be entitled to all revenues from the Tax Subject to this Agreement less the administrative fee retained under section III of this Agreement ("City's Share"). 1 B. The County shall remit and pay to the City, on a monthly basis, the City's Share, less any refunds owed from the City's share to retailers or taxpayers. The County shall make payments to the City on the fifteenth day of the month following the month the revenues were collected, or on the next business day if the fifteenth day falls on a weekend or holiday. C. The City shall reimburse and pay to the County any refund of the Tax Subject to this Agreement paid by the County to a retailer holding a City retail marijuana license or to a taxpayer based upon a purchase from a retailer holding a City retail marijuana store license. As a condition precedent to any reimbursement, County shall provide documentation that the refund was determined pursuant to a final decision of the County or an order of a court of competent jurisdiction and that the refund has been paid by the County. The amount of reimbursement required to be paid by City under this Section C shall be reduced by fifteen percent (15%) of the refund amount representing administrative costs previously paid to the County. Any liability of either Party under this Agreement shall survive the termination of this Agreement. D. The City agrees to support the County's efforts in securing legislation that would recognize the authority of counties to impose special sales taxes on retail marijuana and retail marijuana products, provided that the legislation would prevent a county from collecting a special sales tax in a municipality which levies its own special sales tax unless the county and the municipality have a revenue sharing intergovernmental agreement in place. The City authorizes the County to represent that the City supports such efforts to the extent same are consistent with this Section D. E. The City agrees to use the revenue received through this Agreement only for the purposes itemized in the City's annual budget ordinance following a public hearing. F. Nothing in this Agreement shall be construed to require or place any obligation or responsibility upon the City to be a party to or otherwise assist the County in the collection, administration or enforcement of the special tax on the sale of retail marijuana and retail marijuana products levied pursuant to Resolution No. 13-186 or the Tax Subject to this Agreement. III. COSTS: The Parties agree that the County, as a reimbursement of its administrative costs, shall retain fifteen percent (15%) of all revenues from the Tax collected within the city limits of the City. IV. TERM/TERMINATION: This Agreement shall commence upon the Effective Date and terminate on December 31, 2017. This Agreement shall renew automatically for subsequent one-year terms unless either Party notifies the other of its intent not to renew. A written notice not to renew must be received on or before July 1' in order to become effective the following calendar year. 2 V. OTHER: A. This Agreement constitutes the entire agreement between the Parties and supersedes all prior and contemporaneous agreements, representation, and understandings between them. This Agreement shall be construed and enforced according to the laws of the State of Colorado. No alterations, amendments, changes or modifications to this Agreement shall be valid unless they are contained in writing and executed by all the Parties with the same formality as this Agreement. B. This Agreement shall be binding upon and inure to the benefit of the Parties to it and their respective legal representatives, successors, and assigns. Any delegation or assignment of this Agreement by either Party without the prior written consent of the other Party shall be void. The subject headings of the paragraphs of this Agreement are included for purposes of convenience only and shall not affect the construction or interpretation of its provisions. C. Except as set forth elsewhere in this paragraph, all notices to be given in this Agreement shall be made in writing and shall be sufficient if delivered personally due to the need for timely transmission of information or by Certified Mail to the other party at the following addresses: Pueblo County Budget and Finance Department Pueblo County Courthouse 215 West 10th Street Pueblo, CO 81003 with a copy to Pueblo County Attorney's Office Pueblo County Courthouse 215 West 10th Street Pueblo, CO 81003 And City Manager 1 City Hall Place, 2nd Floor Pueblo, CO 81003 With a copy to: City of Pueblo Department of Law 1 City Hall Place, 3rd Pueblo, CO 81003 D. GOOD FAITH: The Parties shall implement this Agreement in good faith including 3 acting in good faith in all matters that require joint or coordinated action. E. STATUS OF PARTIES: The Parties will perform their duties under this Agreement independent from each other. Neither Party, nor any employee, officer, or agent thereof, will be considered to be an agent or employee of the other Party for any purpose whatsoever. F. NO THIRD PARTY BENEFICIARY: Enforcement of the terms of the Agreement and all rights of action relating to enforcement are strictly reserved to the Parties. Nothing contained in the Agreement gives or allows any claim or right of action to any third person or entity. Any person or entity other than the City or County receiving services or benefits pursuant to the Agreement is an incidental beneficiary only. G. AGREEMENT AS COMPLETE INTEGRATION-AMENDMENTS: This Agreement, including the exhibits attached hereto (each of which is specifically incorporated herein), is intended as the complete integration of all understandings between the Parties. No prior contemporaneous or subsequent addition, deletion, or other amendment hereto shall have any force or effect unless embodied herein in writing and executed in the same manner as this Agreement. No subsequent novation, renewal, addition, deletion or other amendment hereto shall have any force or effect unless embodied in a written amendatory or other Agreement properly executed by the Parties. No oral representation by either party at variance with the terms and conditions of this Agreement or any written amendment to this Agreement shall have any force or effect or bind the Parties. Amendments to this Agreement will become effective when approved by both Parties and executed in the same manner as this Agreement. This Agreement and any amendments shall be binding upon the Parties, their successors and assigns. J. LEGAL AUTHORITY: The Parties assure that they possess the legal authority, pursuant to any proper, appropriate and official motion, resolution or action passed or taken, to enter into this Agreement. The person or persons signing and executing this Agreement do hereby warrant that he/she or they have been fully authorized to execute this Agreement and to validly and legally bind their principals to all the terms, performances and provisions herein set forth. Each Party shall have the right, at its option, to either temporarily suspend or permanently terminate this Agreement, if there is a bona fide dispute as to the legal authority of any person signing the Agreement to enter into this Agreement. K. NO MULTI-YEAR FISCAL OBLIGATION ON CITY. This Agreement is expressly made subject to the limitations of the Colorado Constitution. Nothing herein shall constitute, nor deemed to constitute, the creation of a debt or multi-year fiscal obligation or an obligation of future appropriations by the City Council of Pueblo, contrary to Article X, § 20 Colorado Constitution or any other constitutional, statutory or charter debt limitation. Notwithstanding any other provision of this Agreement, with respect to any financial obligation of the City 4 which may arise under this Agreement in any fiscal year after 2017, in the event the budget or other means of appropriations for any such year fails to provide funds in sufficient amounts to discharge such obligation, such failure shall not constitute a default or breach of this Agreement, including any sub-agreement, attachment, schedule, or exhibit thereto, by the City. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement the day and year first written above. ATTEST: PUEBLO COUNTY, COLORADO By: By: 1446= `t c Clerk to the Board hair, B rd of C'o nt Commissioners Date: II5 /7 ATTEST: CITY OF PUEBLO, A MUNICIPA _ a • � ` B . _ !1�+ g .� By: �"� / Presi.en of the City Council City Clerk Date: PA/- tH . �'1 2017 5