Recreation Advisory Board Agenda and Packet 2019 06 24

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SUBJECT: EXCESS TAX REVENUE TABOR BALLOT ISSUE LANGUAGE DATE: JUNE 11, 2019 PAGE2OF3 ($33,470,000), and requires the tax rate be reduced up to 100 % in future years in proportion to the combined dollar excess. Revenues exceeded both estimates and thus, absent later voter approval to retain this excess, refunds will be due for both in addition to requiring a rate reduction. Therefore, should the voters not approve the City retaining the revenues exceeding the estimates included in the election notice mailed to voters in connection with the 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 with 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 the 0.15% tax in 2018 ($845,795). Additionally, a rate reduction would be applied in future years; due to the large amount of the combined dollar excess, this would likely result in the rate being reduced to 0.0%. Options for discussion of how to logistically provide a refund as well as rate reduction consideration is included in the attached June 11, 2018 Finance Committee memorandum. At the April 1st Finance Committee meeting, members reviewed two alternative TABOR ballot issues. The first would seek voter approval to retain excess revenues received from the 2016 sales and use tax increase and retain the 0.15% rate increase. The second would seek voter approval to retain the 0.15% rate increase, but not retain revenues in excess of the revenue estimates set forth in the 2016 Tabor notice (which would provide a refund of $845,795). Final proposed ballot language for both alternatives is attached. The Finance Committee supports City Council referring the first proposed ballot issue alternative to the voters, which provides no refund and retains the 0.15% rate increase. Once direction is provided regarding the desired ballot language, staff will provide an ordinance on July 9, 2019 for further consideration addressing the TABOR issues and to seek voter approval. FISCAL IMPACT: Fiscal impacts are as follows for the following options: 1) Direct a refund of 2018 excess revenue ($845,795) in 2019, but refer a ballot issue to the voters requesting approval to continue the tax at the 0.15% rate. 2) Refer a ballot issue to the voters requesting approval to keep all revenues from the tax and continue the tax at the 0.15% rate. PROGRAM/SUB-PROGRAM IMPACT: This addresses the Recreation program area to promote the physical, mental, and social well-being of residents thorough a broad range of high -quality, reasonably priced recreation and leisure activities for people of all ages, interests, and ability levels. RECOMMENDATION: Finance Committee and staff support referring a ballot issue to the voters requesting approval to keep all revenues from the tax and continue the tax at the 0.15% rate. CITY COUNCIL COMMUNICATION