HomeMy WebLinkAbout07185ORDINANCE NO. 7185
AN ORDINANCE SUBMITTING TO THE REGISTERED ELECTORS OF THE CITY OF PUEBLO,
COLORADO AT THE SPECIAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 2, 2004
QUESTIONS RELATING TO AN AMENDMENT TO THE CITY'S SALES AND USE TAX
ORDINANCE AND THE USE OF THREE AND THREE - TENTHS PERCENT (3.30 %) OF THE
CITY'S SALES AND USE TAX REVENUE
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1
Questions of amending the City's sales and use tax ordinance and the use of three and
three - tenths percent (3.30 %) of the City's sale and use tax revenue shall be submitted to a vote of
the registered electors of the City of Pueblo at the special municipal election to be held November
2, 2004. The ballot titles (submission clauses and titles) therefor shall be as follows:
Question No.
Shall Ordinance No. 7181 (a copy of which is on file in the office of the City Clerk) of
the City of Pueblo, Colorado be approved, which ordinance amends Chapter 4 of Title XIV
of the Pueblo Municipal Code and authorizes the City to use three and three - tenths percent
(3.30 %) of the City's sales and use tax revenue, which was previously being retained by the
retailers who collect such tax on behalf of the City to cover their expenses in collecting and
remitting such tax, for one or more of the following purposes, in such amounts and
proportions as the City Council shall determine (1) paying the principal of, premium, if any,
and interest on the Urban Renewal Authority of Pueblo, Colorado ( "Authority ") revenue
bonds in the aggregate principal amount of $9,500,000 issued to finance initial construction
of the Pueblo Convention Center and hotel complex, or any bonds issued to refinance such
bonds, (2) paying the net operating and maintenance expenses of the Pueblo Convention
Center, (3) financing the acquisition and construction of parking facilities, (4) assist in the
financing, acquisition, construction and equipping of a health department facility, (5) paying
the principal of, premium, if any, and interest on the Authority's revenue bonds in a principal
amount not to exceed $12,000,000 to be issued to finance an expansion of the Pueblo
Convention Center and related improvements after encumbering all tax allocation revenues
of the Authority to the payment of such bonds, or any bonds issued to refinance such
bonds, and /or (6) reimbursing retailers for their costs incurred in collecting and remitting the
sales and use tax revenues to the City, authorizing the City Council to pledge irrevocably all
or any part of the three and three - tenths percent (3.30 %) of the City's sales and use tax
revenue for any of the foregoing purposes and payment thereof, and shall the revenues
derived from such three and three - tenths percent (3.30 %) of the City's sales and use tax be
collected and spent net of any constitutionally required tax cuts, without limitation or
condition, as a voter approved revenue change and an exception to the limits which would
otherwise apply under Article X, Section 20 of the Colorado Constitution or any other law?
For the Ordinance
Against the Ordinance
Question No.
Shall the City Council of the City of Pueblo, Colorado, be authorized to pledge three
and three - tenths percent (3.30 %) of the City's existing sales and use tax revenue toward
the payment of bonds to be issued by the Urban Renewal Authority of Pueblo, Colorado
( "Authority ") in a principal amount of up to $12,000,000 with a repayment cost not to exceed
$28,500,000 to finance the expansion of the Pueblo Convention Center and related
improvements after encumbering all tax allocation revenues of the Authority to the payment
of such bonds?
Yes
No
SECTION 2
The officers of the City are authorized and directed to take all action necessary, appropriate
or required to effectuate the provisions of this Ordinance.
SECTION 3
This Ordinance shall become effective upon final passage and approval.
INTRODUCED Auaust 9. 2004
PASSED AND APPROVED August 23, 2004
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V, & Wo r
Background Paper for Proposed
ORDINANCE
AGENDA ITEM # ;?/
DATE: August 9, 2004
DEPARTMENT: Law Department
TITLE
AN ORDINANCE SUBMITTING TO THE REGISTERED ELECTORS OF THE CITY
OF PUEBLO, COLORADO AT THE SPECIAL MUNICIPAL ELECTION TO BE
HELD ON NOVEMBER 2, 2004 QUESTIONS RELATING TO AN AMENDMENT TO
THE CITY'S SALES AND USE TAX ORDINANCE AND THE USE OF THREE AND
THREE - TENTHS PERCENT (3.30 %) OF THE CITY'S SALES AND USE TAX
REVENUE
ISSUE
Should the City Council at the request of the Urban Renewal Authority of Pueblo,
Colorado submit to a vote of the registered electors at the special municipal election
to be held November 2, 2004 the two questions set forth in the attached ordinance
and described under Background?
RECOMMENDATION
None.
BACKGROUND
The Urban Renewal Authority of Pueblo, Colorado ( "Authority ") is requesting the
City Council to refer to the vote of the people on November 2, 2004 two ballot
questions as follows:
1. Amending the City sales and use tax ordinance to authorize the City
Council as a voter approved revenue change under TABOR to use the 3.30% of
City's sales and use tax revenues, which were previously being retained by retailers
who collect such tax on behalf of the City to cover their expense in collecting and
remitting such taxes, for one or more of the following purposes: (1) paying the debt
service on Authority's $9.5 million bonds issued to finance initial construction of the
Pueblo Convention Center and hotel complex, or bonds issued to refinance such
bonds, (2) paying the net operating and maintenance expenses of the Pueblo
Convention Center, (3) financing the acquisition and construction of parking
facilities, (4) assist in the financing, acquisition, construction and equipping of a
health department facility, (5) after encumbering all tax allocation revenues of the
Authority, paying the debt services on Authority's bonds in a principal amount of up
to $12,000,000 to be issued to finance the expansion of the Pueblo Convention
Centerand related improvements, and/or (6) reimbursing the retailers fortheircosts
incurred in collecting and remitting the sales and use tax revenues to the City.
(2) Specifically authorizing the City Council to pledge the revenues
generated by 3.30% of City's existing sales and use tax toward the payment of
Authority's bonds to be issued in a principal amount of up to $12,000,000 with a
repayment cost not to exceed $28,500,000 to finance the expansion of the Pueblo
Convention Center and related improvements.
FINANCIAL IMPACT
Historically, 3.3% of the City's sales and use taxes collected by retailers was
retained by them to cover their expenses in collecting and remitting the taxes
( "Vendors' Fees "). By vote of the people in 1993, the Vendors' Fees were
temporarily diverted from the retailers and authorized to be used to (a) pay the debt
services on the Authority's $9.5 million bonds issued to finance initial construction
of the Convention Center and hotel complex, or bonds issued to refinance such
bonds, (b) pay the net operating and maintenance expenses of the Convention
Center, and (c) reimburse the retailers.
The Vendors' Fees generate $1.4 million in revenues annually and will generate
additional revenues as the City's sales and use tax increases over the years.
There is also generated within the urban renewal area $340,000 per year in tax
increment revenues.
Without any increase in Vendors' Fees, the Venders' Fees will generate at least
$35,000,000 in revenue during the extended 25 -year period from 2004 to 2029.
Assuming the tax increment revenue will be $340,000 per year, the tax increment
revenue would generate an additional $8,500,000 during such period, or a total of
$43,500,000.
There is approximately $1.9 million in bond trust funds under the $9.5 million bond
indenture. The Authority has over $1.1 million in unrestricted cash and investments.
The Authority proposes to
(a) refund the approximately $7.5 million balance of $9.5 million bonds,
release the $1.9 million bond trust funds from any obligation to pay the $9.5 million
bonds, and commit $1,675,000 of the bond trust funds for the construction of a
parking structure in HARP.
(b) use $713,850 of its $1 million in unrestricted cash and investments
( "excess tax increment revenues ")to purchase surface parking nearthe Convention
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Center.
(c) use the tax increment revenues for operation of the Authority other
than the Convention Center, and for projects within the expanded urban renewal
area without specifically identifying such projects or the amount of revenues to be
generated by tax increment financing.
(d) issue additional bonds in the principal amount of $12,000,000 to
expand the Convention Center and related improvements.
(e) authorize the City Council to commit the Vendors' Fees to the
payment of debt service on the approximately $7.5 million refunding bonds,
estimated to be $10,800,000, as well as to the payment of debt service on the
additional $12 million bonds, estimated to be $28,500,000, or total debt services of
$39,300,000.
(f) commit and extend the Vendors' Fees to the payment of Authority's
bonds and net operating expenses of the Authority for the expanded Convention
Center for 25 years to 2029. Assuming the Authority has an operating loss of
$500,000 per year instead of the $613,847 loss based upon the Authority's 2004
budget, such loss would exceed $12,500,000 over the next 25 years. Authority's
audit for 2003 shows an operating loss of $860,705. However, additional informa-
tion on page 17 of the audit presented for purposes of analysis and not a required
part of the basic financial statements shows an operating loss of $497,756 including
management fees and incentives.
Authority's proposals will eliminate any possibility for 25 years from 2004 to 2029
that the Vendors' Fees may be returned to the retailers to cover their expenses in
collecting and remitting the sales and use tax for the benefit of the City as well as
any reasonably probability that the Vendors' Fees may be used for a health
department facility or other needed public improvements.
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ORDINANCE NO. 7181
AN ORDINANCE AMENDING CHAPTER 4, TITLE XIV OF
THE PUEBLO MUNICIPAL CODE TO REALLOCATE THE
USE OF THE THREE AND THREE - TENTHS PERCENT
PORTION OF THE CITY'S SALES AND USE TAX
REVENUES WHICH WERE PREVIOUSLY BEING RETAINED
BY THE RETAILERS WHO COLLECT SUCH TAX ON
BEHALF OF THE CITY TO COVER THEIR EXPENSES IN
COLLECTING AND REMITTING SUCH TAX; AUTHORIZING
THE CITY COUNCIL TO DEDICATE THE REVENUES FROM
SUCH THREE AND THREE - TENTHS PORTION OF THE
CITY'S SALES AND USE TAX TO THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE
URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO
( "AUTHORITY ") REVENUE BONDS IN THE AGGREGATE
PRINCIPAL AMOUNT OF $9,500,000 ISSUED TO FINANCE
THE INITIAL CONSTRUCTION OF THE PUEBLO
CONVENTION CENTER AND HOTEL COMPLEX, OR ANY
BONDS ISSUED TO REFINANCE SUCH BONDS, TO THE
PAYMENT OF THE NET OPERATING AND MAINTENANCE
EXPENSES OF THE PUEBLO CONVENTION CENTER, TO
THE FINANCING, ACQUISITION AND CONSTRUCTING OF
PARKING FACILITIES, TO ASSIST IN THE FINANCING,
ACQUISITION, CONSTRUCTION AND EQUIPPING OF A
HEALTH DEPARTMENT FACILITY, TO THE PAYMENT OF
THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON
THE AUTHORITY'S REVENUE BONDS IN A PRINCIPAL
AMOUNT NOT TO EXCEED $12,000,000 TO FINANCE AN
EXPANSION OFTHE PUEBLO CONVENTION CENTERAND
RELATED IMPROVEMENTS AFTER ENCUMBERING ALL
TAX ALLOCATION REVENUES OF THE AUTHORITY TO
THE PAYMENT OF SUCH BONDS, AND /OR TO THE
REIMBURSEMENT OF RETAILERS FOR THEIR COSTS
INCURRED IN COLLECTING AND REMITTING THE SALES
AND USE TAX REVENUES TO THE CITY; CREATING A
SPECIAL FUND FOR THE DEPOSIT OF SUCH REVENUES;
FINDING AND DETERMINING THAT THE EXPENDITURE
OF SUCH REVENUES FOR SUCH PURPOSES IS A PUBLIC
PURPOSE AND MUNICIPAL FUNCTION; AND PROVIDING
OTHER MATTERS RELATING THERETO
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (Brackets indicate
matter deleted; underscoring indicates matter added)
SECTION 1
Chapter 4, Title XIV of the Pueblo Municipal Code (a portion of Ordinance No. 2189
approved by a vote of the People on November 8, 1955, as amended by Ordinance Nos.
3160, 3474, 4235, 5170, 5314, 5668 and 5810 ) is hereby amended to read as follows:
Sec. 14 -4 -17. Collection fees.
Notwithstanding Sections 14 -4 -1 and 14 -4 -85 of this Chapter, three and three - tenths
percent (3.3 %) of the revenues derived from the taxes imposed by this Chapter shall be
deposited and placed in a special fund hereby created pursuant to Section 7 -21 of the
Charter of the City to be known as the "Collection Fee Fund ". The moneys in the Collection
Fee Fund shall be used solely for one or more of the following purposes in such amounts
and proportions as the City Council shall determine: [(1) paying the operation and
maintenance expenses of a civic center and hotel complex within the Urban Renewal
Authority of the City; (2) paying the principal of, premium, if any, and interest on revenue
bonds of the Urban Renewal Authority of the City issued to finance the civic center and
hotel complex and other improvements, or any bonds issued to refinance such bonds;
and /or (3) reimbursing retailers for their costs incurred in collecting and remitting the sales
and use tax revenues to the City.] (1) paving the principal of premium if any, and
interest on the Urban Renewal Authority of Pueblo Colorado ("Authority") revenue
bonds in the aggregate principal amount of $9 500 000 issued to finance initial
construction of the Pueblo Convention Center and hotel complex, or any bonds
issued to refinance such bonds (2) paying the net operating and maintenance
expenses of the Pueblo Convention Center, (3) financing the acquisition and
construction of parking facilities (4) assist in the financing acquisition construction
and equipping of a health department facility, (5) paying the principal of premium
if any, and interest on the Authority's revenue bonds in a principal amount not to
exceed $12,000,000 to be issued to finance an expansion of the Pueblo Convention
Center and related improvements after encumbering all tax allocation revenues of
the Authority to the payment of such bonds or any bonds issued to refinance such
bonds. and /or (6) reimbursing retailers for their costs incurred in collecting and
remitting the sales and use tax revenues to the City The City Council is authorized
to pledge irrevocably all or any part of the moneys in the Collection Fee Fund for [the] any
and all of the purposes set forth in clauses [(1) and /or (2)] (1), (2). (3), (4) and (5) above.
SECTION 2
The People of Pueblo do hereby find, determine and declare that the expenditures
of revenues from the three and three - tenths percent of the City's sales and use tax
revenues deposited to the Collection Fee Fund established pursuant to Section 14 -4 -17
of Chapter 4, Title XIV of the Pueblo Municipal Code (Ordinance No. 2189 approved by a
vote of the People on November 8, 1955, as amended by Ordinance Nos. 3160, 3474,
4734, 5170, 5314, 5668, 5810 and 7181) will promote the public peace, health, safety and
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welfare and the expenditure of such revenues for the purposes set forth in said Section 14-
4-17 is a public purpose and municipal function notwithstanding such expenditure may,
directly or indirectly, aid, assist or benefit private persons, corporations or other entities.
SECTION 3
All ordinances relating to sales and use taxes heretofore adopted, amended or
implemented shall remain in full force and effect except as the same have been previously
amended or repealed or as same may be amended by this Ordinance.
SECTION 4
All ordinances, or parts thereof, inconsistent herewith are hereby repealed to the
extent of such inconsistency. This repealer shall not be construed to revive any ordinance,
or part thereof, heretofore repealed.
SECTION 5
If any section, subsection, paragraph, clause or other provision of this Ordinance
for any reason is invalid or unenforceable, the invalidity or unenforceability of such section,
subsection, paragraph, clause or other provision shall not affect any of the remaining
provisions of this Ordinance.
SECTION 6
This Ordinance shall become effective upon majority vote in favor thereof by the
registered electors of Pueblo voting thereon at the Special Municipal Election to be held
Tuesday, November 2, 2004.
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