Finance Committee Agenda and Packet 2019 05 17

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Finance Committee City of Louisville May 17, 2019 Page 2 of 2 COLLECTED FOR OPERATING AND MAINTAINING THE LOUISVILLE RECREATION/SENIOR CENTER AND POOL FACILITIES AT MEMORY SQUARE PARK WITHOUT REFUNDING TO THE TAXPAYERS THE AMOUNT THAT EXCEEDED THE REVENUE ESTIMATES IN THE ELECTION NOTICE MAILED TO VOTERS IN 2016? Refund Excess Revenue; Retain Rate: WITHOUT CREATING ANY NEW TAX OR INCREASING ANY CURRENT TAXES TAX RATE, SHALL THE CITY OF LOUISVILLE REFUND TO THE TAXPAYERS $270,795 IN EXCESS REVENUE RECEIVED BY THE CITY IN 2018 EXCEEDING ESTIMATES INCLUDED IN THE ELECTION NOTICE MAILED TO VOTERS FOR FROM THE 2016 VOTER -APPROVED 0.15 PERCENT INCREASE IN SALES AND USE TAX, AND BE PERMITTED TO CONTINUE TO COLLECT THE TAX AT THE PREVIOUSLY APPROVED RATE, AND SPEND ALL REVENUES COLLECTED FOR OPERATING AND MAINTAINING THE LOUISVILLE RECREATION/SENIOR CENTER AND POOL FACILITIES AT MEMORY SQUARE PARK? During our discussions with Mr. Wisor, it became clear the amount of potential refund is larger than had been previously discussed. Absent later voter approval, TABOR requires a refund if either the revenue generated by the new tax exceeded the estimate ($575,000) or the City's total 2018 fiscal year spending without the tax increase exceeded the amount in the TABOR notice ($33,470,000), and requires the tax rate be reduced in future years in proportion to the combined dollar excess. We now know that revenues exceeded both estimates and Mr. Wisor has advised refunds are due for both. The Office of Legislative Legal Services ("OLLS") has interpreted the total amount to be refunded when both estimates are exceeded is limited to the total tax revenues collected for the tax (in this case, the 0.15% increase). Mr. Wisor thought this interpretation by OLLS made sense, but cautioned that interpretation has not been judicially tested. Therefore, should the voters not approve the City retaining the revenues exceeding the estimates (plural) included in the election notice mailed to voters in connection with this tax increase, the City will need to refund the revenue collected above the $575,000 estimate for the new tax ($270,795) plus the amount the City's 2018 fiscal year spending without the tax increase exceeded the estimate in the TABOR notice ($4,662,787), but the amount of refund should be capped at the total revenue collected for this 0.15% tax in 2018 ($845,795). City staff recommends the Finance Committee support City Council referring the first proposed ballot issue alternative to the voters, which provides no refund and retains the 0.15% rate increase. Final proposed ballot language for both alternatives is attached to this memorandum. Please let us know if you have questions. cc: Heather Balser, City Manager Kevin Watson, Finance Director 5/13/2019 11:39 AM [kink] R:\Louisville\Finance & Audit\Memo. Final Proposed TABOR Rec Tax Ballot Issue.docx Kelly PC 999 18th Street, Suite 145oS, Denver, CO 80203 11