HomeMy WebLinkAboutAgenda - 11-04-2010 - 7b 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: November 4, 2010
Action Agenda
Item No. � ' b
SUBJECT: Follow-up on the November 2, 2010 Special Advisory Referendum Concerning
the Levy of a One-Quarter Cent (1/4¢) County Sales and Use Tax and
Discussion of Potential Next Steps Pending Outcome of the Referendum
DEPARTMENT: Manager & Financial Services PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1: 6/15/10 Resolution Calling Frank Clifton, County Manager,
a Special Advisory 245-2300
Referendum Concerning Clarence Grier, Financial Services,
the Levy of a One-Quarter (919) 245-2453
Cent County Sales and Michael Talbert, Financial Services,
Use Tax (919) 245-2153
Attachment 2: North Carolina General
Statute—Article 46 One-
Quarter Cent County
Sales and Use Tax
Attachment 3: 9/2/10 Resolution
Regarding Uses of
Potential Revenues from
a One-Quarter Cent (1/4)
County Sales and Use
Tax
PURPOSE: To follow-up on the November 2, 2010 Special Advisory Referendum Concerning
the Levy of a One-Quarter Cent (1/4¢) County Sales and Use Tax, and if approved by voters,
discuss the next steps/course of action required by the Board of Commissioners to proceed with
scheduling a public hearing to consider a resolution to levy the One-Quarter Cent (1/4¢) Sales
and Use Tax.
BACKGROUND: During the 2007 legislative session, the North Carolina General Assembly
granted county boards of commissioners the authority to levy, subject to voter approval, an
additional one-quarter cent (1/4¢) county sales and use tax referred to as the Article 46 sales
and use tax. As authorized by the General Assembly, the Article 46 sales tax cannot apply to
consumer food purchases. There is also no legislative requirement, or mechanism, for counties
to share the additional one-quarter cent sales tax with municipalities.
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Seventeen out of 100 North Carolina counties have approved the Article 46 one quarter cent
(1/4¢) county sales and use tax. An additional 12 counties scheduled a referendum on the tax
for November 2, 2010.
The Board of Commissioners held a public hearing on June 1, 2010 to solicit comments from
the public on a possible November 2, 2010 Special Advisory Referendum concerning the Levy
of a One-Quarter Cent (1/4¢) County Sales and Use Tax.
At its June 15, 2010 regular meeting, the Board considered and approved a resolution
scheduling a November 2, 2010 Special Advisory Referendum concerning the Levy of a One-
Quarter Cent (1/4¢) County Sales and Use Tax.
The Board held a public hearing on August 17, 2010 to solicit comments from the public on the
possible uses for the One-Quarter Cent sales tax revenues. The Board considered potential
uses at an August 19, 2010 work session and gave direction to staff to formulate a resolution
addressing the potential uses for consideration at the Board's September 2, 2010 regular
meeting. On September 2, 2010 the Board adopted a resolution to document the Board's
intended uses of the revenues from a prospective One-Quarter Cent (1/4) Sales and Use Tax.
If a majority of voters approve the Article 46 sales tax referendum, the Board will be required
under the North Carolina General Statutes to give ten (10) days public notice of the Board's
intent to levy the tax. The Board would then hold a required public hearing and consider a new
resolution to actually levy the tax. The Board must adopt that additional resolution by
December 31, 2010 in order for the tax to take effect by April 1, 2011.
The North Carolina Association of County Commissioners recommended that counties
undertake a public education campaign to educate voters. County staff developed an
education initiative similar to those the County has undertaken for past voter approved bond
referenda. The Board approved an amount not to exceed $40,000 for a public education
campaign for the November 2, 2010 referendum. The County has made an extensive effort to
educate voters on the sales tax referendum by printing and distributing 100,000 brochures and
100 posters. The distribution of materials has been coordinated with both school systems and
the business community. There were also block ads in local news papers, radio advertisements
on both WUNC and WCHL, and the Department on Aging's television show, "In Praise of Age",
dedicated finro shows to educating Orange County voters. Numerous elected and appointed
County officials have made public service announcements and written letters to the editors of
local news papers in an effort the educate the public on this issue.
FINANCIAL IMPACT: There is no financial impact associated with follow-up on the November
2, 2010 Special Advisory Referendum and discussion on the next steps/course of action
required by the Board of Commissioners if the ballot measure is approved by Orange County
voters.
If a majority of voters approves the sales tax and the Board of Commissioners implements the
sales tax on April 1, 2011, the Article 46 sales and use tax would generate approximately
$2,300,000 annually for the County. The sales tax would generate approximately $575,000
during the remainder/last quarter of FY 2010-11.
RECOMMENDATION(S): The Manager recommends the Board:
1) follow-up on the November 2, 2010 Special Advisory Referendum;
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And if the ballot measure is approved bv voters:
2) discuss the next steps/course of action required by the Board of
Commissioners to levy the tax;
3) authorize staff to schedule a public hearing and develop a draft resolution to
levy the tax for the Board's consideration at either the November 16, 2010
or December 6, 2010 regular meeting; and
4) provide direction to staff as to any language, other than as required by North
Carolina General Statutes, to be included in the draft resolution to levy the
One-Quarter Cent (1/4¢) Sales and Use Tax.
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' � RESOLUTI4N CALLING FOR A NOVEMBER 2, 2010 SPECIAL ADVISORY
� REFERENDUM CONCERNING THE LEVY OF A ONE-QUARTER CENT (114¢)
� COUNTY SALES AND USE TAX �
' WHEREAS, the North Caro(ina General Assembfy has enacted the "One-Quarter
Cent (1/4¢) Couniy Sales and Use Tax Act," Article 46 of Chapter 105 of the
North Carolina General .Statutes (Session Law 2007-323), which authorizes
counties to levy a loc�l sales and use tax; and � � �'
WHEREAS, in order to levy the local sales and use tax, the Counfy of Orange
must conduct an advisory referendum in accordance with the provisions of the
North Carofina General Statutes Section 163-287;
NOW, THEREFORE, BE (T RESOLVED by the Orange Couniy Board of
Commissioners that: �
Section 1: In accordance with the North Carolina General Statutes, a special
advisory referendum is hereby calfed to be hefd between the nocrnal time the
pofls are open on Tuesday, November 2, 2010, at which there shall be submitted �
to the qua(ified voters of the Couniy of Orange the question set forth in Section 3
of this Resolution. �
ISection 2: The Orange County Board of Efections shall conduct - said
-� Refe.rendum. .
. Section 3:.The ba(lot que.stion shall be in the fiollowing form: �
[ ] FOR [] AGAINST � . �
Local sales and use tax at the rate of one-quarter percent (0.25%) in addition
to afl other State and local sales and use taxes. �
� .Section 4: The Clerk to the Board of Commissioners is authorized and directed to
. transmit a certified copy of this Resolution to the Orange County Board of
Elections within three (3) days after the passage hereof.
Secfion 5: The Board 'of Elections shall publish legal notice of the special
advisory referendum in accordance with North Carolina General Statutes Section �
163-287. � �
Section 6: This Resofution shall take effect upon its passage. � � .
ADOPTED this the�day of , 2010. .
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Article 46.
One-Quarter Cent(1/4¢) County Sales and Use Tax.
§ 105-535. Short title.
This Article is the One-Quarter Cent (1/4¢) County Sales and Use Tax Act.
(2007-323, s. 31.17(b).)
§ 105-536. Limitations.
This Article applies only to counties that levy the first one-cent (1¢) sales and use tax
under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the
first one-half cent (1/2¢) local sales and use ta�c under Article 40 of this Chapter, and the
second one-half cent (1/2¢) local sales and use tax under Article 42 of this Chapter.
(2007-323, s. 31.17(b).)
§ 105-537. Levy.
(a) Authority. — If the majority of those voting in a referendum held pursuant to
this Article vote for the levy of the tax, the board of county commissioners may, by
resolution and after 10 days' public notice, levy a local sales and use tax at a rate of
one-quarter percent(0.25%).
(b) Vote. — T$e board of county commissioners may direct the county board of
elections to conduct an advisory referendum on the question of whether to levy a local
sales and use tax in the county as provided in this Article. The election shall be held on a
date jointly agreed upon by the board of county commissioners and the board of elections
and shall be held in accordance with the procedures of G.S. 163-287.
(c) Ba11ot Question. —The form of the question to be presented on a ballot for a
special election concerning the levy of the tax authorized by this Article sha11 be:
"[] FOR [] AGAINST
Local sales and use ta�� at the rate of one-quarter percent (0.25%) in addition
to a11 other State and local sales and use ta��es."
(d) Limitation. —A taa� levied under this Article may not be in effect in a county
at the same time as a ta.x levied under Article 60 of this Chapter. (2007-323, s. 31.17(b).)
§ 105-538. Administration of taxes.
Except as provided in tlus Article, the adoption, levy, collection, administration, and
repeal of these additional taxes must be in accordance with Article 39 of tlus Chapter.
G.S. 105-468.1 is an administrative provision that applies to this A.rticle. A tax levied
under this Article does not apply to the sales price of food that is exempt from tax
pursuant to G.S. 105-164.13B or to the sales price of a bundled transaction taxable
pursuant to G.S. 105-467(a)(Sa). The Secretary shall not divide the amount allocated to a
county between the county and the municipalities within the county. (2007-323, s.
31.17(b); 2007-345, s. 14.5(a); 2008-134, s. 75; 2009-445, s. 18.)
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ORANGE COUNTY BOARD OF COMMISSIONERS
A Resolution Regarding Uses of Potential Revenues
from a One-Quarter Cent (1/4¢) County Sales and Use Tax
WHEREAS, there are significant pressing infrastructure, economic development, school, and
other County capital needs that are precipitated by growth pressures and the new economic
reality facing Orange County; and
WHEREAS, it is important to provide Orange County taxpayers with alternatives to the
pressure to raise property taxes to address these and other County needs; and
WHEREAS, the levy of a Article 46 one-quarter cent (1/4¢) County sales and use tax would _
provide a new County revenue source and would generate approximately $2,300,000
annually for the County; and
WHEREAS, it is important for Orange County to plan for future economic development that
will enable the County to recruit, retain, grow, and generate businesses and jobs that are
desirable; and
WHEREAS, it is important that Orange County expand collaboration and cooperation of
economic development efforts and decisions befinreen Orange County and the towns of
Chapel Hill, Carrboro and Hillsborough and the cities of Mebane and Durham; and
WHEREAS, it is important for Orange County to meet public school needs; and
WHEREAS, it is important to provide the residents of Orange County improved Library and
Emergency Medical Services to meet the increased demand of a growing popu�ation; and
WHEREAS, the Board of Commissioners establishes a 5 year commitment to allocate Article
46 one-quarter cent (1/4¢) County sales and use tax proceeds as follows:
a. 42.5% of the funding will be allocate.d in an equitable manner befinreen the County's
two school systems for the dedicated purpose of facility improvements at `older'
schools within all of Orange County and the procurement of technology. Each school
system will establish a list of prioritized needs for older schools within the County.
Funding provided by the passage of the referendum will be allocated to those
prioritized projects. Progress will be evaluated annually and adjustments made
according to needs agreed upon by the School Boards and Board of County
Commissioners;
b. 42.5% of the funding will be allocated to economic development efforts including
funding infrastructure improvements needed to recruit new businesses and expand
existing businesses; funding for business loans and grants to grow businesses in
Orange County; targeted business recruitment, retention, and expansion efforts; and
community branding and marketing; '
c. 15% of the funding will be allocated equally to improve Library and Emergency
Medical Services over a five-year period.
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WHEREA�, if additional funding does not come from the one-quarter cent (1/4¢) County
sales and use tax, the property tax will be the primary funding source available for schools,
economic development initiatives, and library & emergency medical services; and
WHEREAS, to distinguish and separate the revenues produced by this '/4 cent sales tax if
approved by Orange County voters, a Special Revenue Fund will be established to receive
and account for the sales tax revenue. These funds will remain separate from the county's
general fund to allow for more accurate tracking of revenues and expenditures in accordance
with initial five year allocation plan established as part of this resolution;
NOW, THEREFORE, BE IT RESOLVED THAT the Orange County Board of Commissioners
hereby states its intent to use the revenues from the Article 46 one-quarter cent (1/4¢)
County sales and use tax, if approved by the voters of Orange County, for currently unfunded
or underfunded economic development, public school and library & emergency medical
services for a period of five years, with a scheduled implementation date of April 1, 2011.
BE IT FURTHER RESOLVED THAT proceeds from the one-quarter cent (1/4¢) County sales
and use tax in later years will be used to address priorities as established by the Board of
Commissioners in the County's Capital Investment Plan.
This the 2"d day of September, 2010.
� �, G�-
Valerie Foushee, Chair
Orange County Board of Commissioners