Docstoc

City of Littleton

Document Sample
City of Littleton Powered By Docstoc
					City of Littleton                                          Council Communication
     Date          Agenda No.                                         Subject

    9/18/07           7(a)         Ordinance on First Reading Appropriating Funds for a TABOR Refund and
                                   Associated Costs

 Initiated By:            Doug Farmen, Finance Director
 Action Proposed:         Approve Ordinance on First Reading; Set Public Hearing Date
 Presented By:            Doug Farmen, Finance Director


INTRODUCTION
The purpose of this communication is to present to the City Council a Budget Amendment Ordinance increasing
the General Fund Budget Appropriation.


HISTORY AND FACTS
Appropriations in the General Fund are recommended to be increased by $1,149,484 relating to a required
TABOR refund for 2006.

In accordance with Section 20 of article X of the state constitution, the City has determined that revenues from
sources not excluded from fiscal year spending have exceeded the limitation on fiscal year spending for the
fiscal year ended December 31, 2006. This excess must be refunded in the next fiscal year unless voters
approve a revenue change as an offset.

The amount of the TABOR excess as calculated is $1,119,484. In addition, costs for preparing and mailing
refunds have been estimated at $30,000. This amount is over and above the TABOR refund amount and,
legally, must be an added cost for the City to bear.


FINANCIAL DETAILS:
2007 Budget appropriations are recommended to increase by $1,149,484.

The amount of the TABOR excess as calculated is $1,119,484. In addition, costs identified to prepare the
refunds have been estimated at $30,000. This includes the costs of preparing and mailing checks.


LEGAL OPINION
The City Attorney has reviewed the attached document for legal conformance.
      Date               Agenda No.                                             Subject

    9/18/07                   7(a)               Ordinance on First Reading Appropriating Funds for a TABOR Refund and
                                                 Associated Costs


CONFLICTS AND/OR COMPLICATIONS
This ordinance appropriates the money to distribute the refund. At the October 2nd meeting, the council will
also consider a resolution that specifies the method of the refund. The only guidance in the Tabor
Amendment is that any fund must be “reasonable”, subject to judicial review.

Since the majority of cities in Colorado no longer have revenue caps, there have been very few test cases
about refunds. Earlier this year, staff prepared a background memo outlining several possible methods, all
of which have pros and cons depending on fairness and practicality. In addition, since approximately
$500,000 of the 2006 surplus is attributed to Arapahoe and Jefferson County open space “share-back” funds,
it is difficult to determine what specific categories of tax revenue may have “caused” the remaining
$600,000 of surplus.

A sales tax holiday was discussed, but there are significant challenges for record keeping and accurate
accounting. Using the county voter registration records would reach the largest number of residents, but
there are concerns that many voters may have moved and not yet been purged by the counties, and it also
excludes residents who are either not registered or may be ineligible to vote. The county property tax
records are probably the most accurate and up-to-date, but if the refund is calculated on a proportional basis
of actual tax paid, high value properties that paid large amounts of property tax would also receive the
largest refunds.

At the September 4th council meeting, the council directed staff to prepare a refund using county property tax
records and to make a calculation based upon a proportion of property tax paid. However the council must
formally adopt by resolution a method at the October 2nd or at a subsequent council meeting in sufficient
time to allow the Finance Department to process and mail the refunds yet this year.


CONCLUSION AND RECOMMENDATIONS
Staff recommends approval of the Ordinance on first reading.


SUGGESTED MOTION
I move that the Budget Amendment Ordinance amending the 2006 Annual Appropriation Bill by increasing
total expenditures by $1,149,484, be approved on first reading; that the ordinance be published by posting at
the Littleton Center, Bemis Library, the Municipal Courthouse and the City of Littleton website; and that a
public hearing be set for October 2, 2007.

Moved by: ______________________________________

Seconded by: ____________________________________


Yes __________ No __________ Absent __________


J:Finance/Council Communications/2007 TABOR 1st Reading
                                                               Council Communication
     Date         Agenda No.                                         Subject

   09/18/07           9(a)        Option Agreement to Acquire Farmland

 Initiated By:           Littleton/Englewood Wastewater Treatment Plant Supervisory Committee
 Action Proposed:        Approve Revised Option Agreement
 Presented By:           Charles Blosten, Public Services Director and Larry Berkowitz, City Attorney

INTRODUCTION/HISTORY AND FACTS

In June, City Council approved an Option Agreement to acquire 1,270 acres of farmland owned by Gary and
Nancy Meier. At that time, it was anticipated the proposed agreement would need to be modified as the earnest
money was to be held in an escrow account. The changes were not expected to be significant in substance.
Since then, the proposed Option Agreement has been materially changed and staff feels it is appropriate to
request further council approval.

Originally, the agreement called for the earnest money to be placed into an escrow account; if the seller
defaulted on the contract, the escrow funds would be retuned to the two cities. Now, instead of a deposit on the
option, the cities will pay the earnest money ($82,500) to Guaranty Bank and the deposited funds will be
credited against the interest owed to the bank by the sellers. If the option to acquire the property is not
exercised on or before December 15, 2007, the interest payment will not be refunded back to the cities.

The interest payment will be credited against the purchase price of $550,000 at closing.

FINANCIAL DETAILS

The earnest funds are available in the 2007 L/EWWTP budget. The remainder of the money required to
purchase the property will be shared (50/50) with the City of Englewood and is budgeted for 2008.

LEGAL OPINION

The City Attorney has approved the new Option Agreement and approved as to form.

Per the attorney for the L/EWWTP:
The bottom line is that, after considerable negotiation, the Bank is willing to execute a release of its
liens on the property based on a $550,000 purchase price if:
(1) the deal is restructured such that the option payment of $82,430 is immediately payable upon
execution of the option agreement and applied to the interest due on the Meiers' Promissory Note to
the Bank, and that this is done by September 30;
(2) the Bank receives the net proceeds of the sale ($467,570) less customary and reasonable closing
costs on or before February 15, 2008; and
(3) the cities consent to an assignment of the Farm Lease by Meier to the Bank at the option of the
Bank.
        Date               Agenda No.                                             Subject

     09/18/07                    9(a)             Option Agreement to Acquire Farmland


CONFLICTS AND/OR COMPLICATIONS

A couple of things have recently transpired on the proposed purchase property. First, Guaranty Bank indicated
the escrow arrangement for the option payment would not be acceptable to them because the landowner is
already about 9 months in arrears on his last payment. Second, Guaranty Bank had the farm appraised for
$625,000, or $75,000 more than the asking price.

In the event the seller defaults, the cities will have the right to an action for specific performance of the
contract. If the buyers (cities) default, the funds will not be returned to the cities.

It is fully expected the two cities will exercise the option contract on or before December 15th and that a closing
will be held within 60 days of this date.

CONCLUSION AND RECOMMENDATIONS

The L/EWWTP Supervisory Committee feels the acquisition of this property is beneficial for our use and
recommends approval of the revised Option Agreement.

SUGGESTED MOTION

I move the Option Agreement in substantially the form presented together with the proposed Farm Lease with
Gary and Nancy Meier for acquisition of 1,270 acres in Arapahoe and Adams Counties be approved.

Moved by: ______________________________________

Seconded by: ____________________________________

Yes __________ No __________ Absent __________

lml\cc\Option Agreement to Acquire Farmland cc1




                                                                     -2-

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:3
posted:10/14/2011
language:English
pages:4
gjmpzlaezgx gjmpzlaezgx
About