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HomeMy WebLinkAboutAgenda - 10-09-2007-6iORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 9, 2007 Action Agenda ~ Item No. (o - j SUBJECT: Resolution of Intent to Create a Local Revenue Options Education Advisory Committee Including Committee Charge and Structure DEPARTMENT: County Commissioners PUBLIC HEARING: (Y/N) No County Manager ATTACHMENT(S): Attachment 1. Timeline for May 6, 2008 Local Revenue Options Referendum Attachment 2. Draft Resolution Attachment 3. Draft Committee Charge Attachment 4. Draft Committee Structure INFORMATION CONTACT: Moses Carey, Chair (919) 254-2130 Laura Blackmon, (919) 245-2300 PURPOSE: To consider a resolution indicating the intent of the Board of County Commissioners to create a Local Revenue Options Education Advisory Committee that will develop and disseminate information to voters concerning the May 6, 2008 local revenue options referendum and to consider a proposed charge to, and structure af, that committee. BACKGROUND: During the 2007 legislative session, the General Assembly granted counties the authority to enact new local revenue options - either a .4% land transfer tax or an additional '/4-cent sales tax. There are several important factors related to the new options: • Counties must have voter approval in order to enact either of these taxes • The ballot can include referenda for both the land transfer tax and the'/4-cent sales tax • There are no restrictions on the use of either of the new local revenues • Should the Board choose to voluntarily designate the uses of the new revenue(s) (for example for capital infrastructure or to retire debt), the ballot language cannot stipulate uses of the new revenues • Counties cannot enact both revenues -should Commissioners include both referenda on the ballot and voters agree to both of them, Commissioners would have to choose which local revenue to authorize On September 19, 2007, Commissioners decided to seek voter approval of the local revenue options on the May 6, 2008 ballot, agreed to a tentative timeline for seeking voter approval and decided to seek input from community partners regarding which tax(es) to include on the ballot and possible uses of the new revenues. The attached timeline offers a general sense of actions 2 that need to occur in order for the revenue question(s) to be an the May 6 ballot. At the September 19 meeting, Commissioners agreed to the dates associated with the first three actions outlined in the timeline. Further Board discussion regarding the timeline will occur during the months of October and November 2007. Local Revenue Options Education Advisory Committee Voter education is an integral part of the Local Revenue Options referendum. As proposed, the Local Revenue Options Education Advisory Committee will help the Board of County Commissioners develop and disseminate factual information about the need for new local revenue option(s). The attached resolution indicates the Board's intention to appoint a Local Revenue Options Education Advisory Committee comprised of interested partners who will communicate to community groups, civic organizations and voters in general concerning the May 6, 2008 local revenue options referendum for Orange County. The resolution includes plans, in accordance with the timeline included in Attachment 1 of this agenda abstract, for the Board to appoint Committee members and a chair, or co-chairs, at its November 5, 2007 regular meeting. Also attached to this abstract is a proposed charge to the committee and a suggested structure for the Committee. While the proposed charge and structure are similar to the framework used during the 2001 bond education process, it is also unique to the local revenue options. Funding the Education Initiative It is important to note that Commissioners may designate public funds to present relevant factual information to voters about the proposed local revenue options and the circumstances that have contributed to the need for the revenues. On the other hand, counties cannot expend public funds on campaigns to either promote or defeat passage of the local revenue options. There may be a number of options for developing and disseminating educational materials associated with the local revenue options referendum. However, based on current workload and expertise, staff recommends hiring an outside consultant to assist the County with educating voters. With such an arrangement, County staff would be responsible for providing facts, statistics and analysis while the consultant would offer expertise in design, format and dissemination of the actual public information materials. The consultant would work closely with County staff and the Education Advisory Committee in developing the materials. The Board of County Commissioners will have final approval of the materials before dissemination to the public. FINANCIAL IMPACT: Given the fact that the General Assembly approved legislation giving counties the authority to seek voter approval for new local revenues after the beginning of the current fiscal year, the Board's approved 2007-08 budget did not include an appropriation that would cover the cost of educating voters. Staff anticipates the direct cost of the education activities and informational materials to be $15,000 not including the cost of hiring an outside consultant to develop the educational (non-promotional) materials. Staff recommends that the Board direct staff to determine a funding source to cover the costs of educating voters on the Local Revenue Options, and report the source to the Board at the November 5, 2007 regular Board meeting. With regard to the financial impact of the newly enacted revenue options, it is important to note that an affirmative vote in May 2008 would result in proceeds from the new revenue beginning during the upcoming 2008-09 fiscal year. Other pertinent specifics related to the individual revenue options include: ~- 1/4 Cent Sales Tax o September 1, 2008 is the earliest date that the sales tax would become effective if Commissioners levied the sales tax via resolution following a May 2008 referendum. o The State would distribute the new'/4-cent sales tax to counties based on point of delivery and not on a per capita basis. o As authorized, the new sales tax would not apply to food purchases. o There are no legislative requirements for counties to share the newly authorized '/4-cent sales tax with local municipalities. o Based on information received from the NC Association of County Commissioners, Orange County can expect $3,031,453 from the '/4-cent sales tax -the equivalent of about 2.4 cents in current ad valorem property tax. o According to statistics, a family of three with a median income of $55,000 per year could expect to pay an additional $51 per year with the new'/4-cent sales tax. -~k .4% Land Transfer Tax o Should Commissioners receive voter approval of the land transfer tax on May 6, 2008, the effective date of the tax would be July 1, 2008. o The County currently levies a .2% land transfer tax -more commonly referred to as "deed stamps". The newly authorized land transfer tax would increase the tax by .4% bringing the total charge to .6% of the real estate sale price. o The Register of Deeds Office collects the current .2% deed stamp revenues at the time of real estate sales. As mandated by the State, the Register of Deeds remits 50% of the current .2% deed stamps collections to the State of NC. During fiscal year 2006-07, Orange County collected $2,056,539 in deed stamps and remitted one-half of that amount ($1,028,270) to the State as their share of the collections. o There are no legislative requirements for counties to share the newly authorized .4% land transfer tax with the State or with local municipalities. o Based on information received from the NC Association of County Commissioners, Orange County can expect $4,013,532 from the land transfer tax -the equivalent of about 3.2 cents in current ad valorem property tax. o A .4% land transfer tax would equate to $800 on a home sold for $200,000 and $2,000 on a home sold for $500,000. Both of these would be in addition to the .2% deed stamps currently collected by the Register of Deeds. The Register of Deeds would collect the monies at the time of sale. RECOMMENDATION (S): The Manager recommends that the Board adopt the attached resolution, approve the proposed Committee charge and structure, request that the Clerk to the Board begin advertisement for citizens interested in serving on the Committee and direct staff to determine a funding source to cover the cost of the educational component of the May 6, 2008 Local Revenue Options Referendum. Attachment 1. Timeline for May 6, 2008 focal Revenue Options Referendum Action Target Date BOCC declares its intention to appoint a Local Revenue Options Education Advisory Committee, the next steps would be: • Adopt Resolution of Intent to Create Local Revenue Options Education Advisory Committee October 9, 2007 • Approve Advisory Committee Charge • Determine structure of Advisory Committee Advertise for Local Revenue Options Education Advisory Committee October 10 through 24, volunteers 2007 BOCC review education advisory group applications and appoint November 5, volunteers 2007 Organizational meeting of Local Revenue Options Education Advisory No later than November 16, Committee 2007 Completed no Local Revenue Options Education Advisory Committee Meetings later than January 11, 2008 ~: Report from Local Revenue Options Education Advisory Group to BOCC January 29, 2008 -~: Conduct Public Hearing Regarding Local Revenue Options Final decisions regarding -~k Use of new revenues No later than ~1= Which tax(es) to include on the ballot February 19, 2008 ~~. Next steps -Public Education Initiative Notify Orange County Board of Elections of Board's Intent to Seek No later than February 29, Voter Approval of Local Revenue Option(s) on May 6, 2008 2008 Public Education Initiative (examples might include informational February, brochures mailed to voters and distributed at major community March, April functions and newspaper articles by community leaders) 2008 Primary Election May 6, 2008 Orange County Board of County Commissioners A Resolution of Intent to Create a Local Revenue Options Education Advisory Committee WHEREAS, local governments in North Carolina have historically relied heavily upon ad valorem property taxes as their major source of revenue; and WHEREAS, for a number of years, the Orange County Board of County Commissioners, the North Carolina Association of County Commissioners and many other Boards across the state, have lobbied the General Assembly for legislative authority to expand counties' revenue options and lessen counties' reliance on property taxes; and WHEREAS, during the 2007 legislative session, the North Carolina General Assembly granted counties the authority to enact new local revenue options - either a .4% land transfer tax or an additional ~/4-cent sales tax; and WHEREAS, on September 19, 2007, the Orange County Board of County Commissioners decided to seek voter approval of the local revenue options on the May 6, 2008 ballot, agreed to a tentative timeline for seeking voter approval and decided to seek input from community partners regarding which tax(es) to include on the ballot; NOW, THEREFORE BE IT RESOLVED THAT the Orange County Board of County Commissioners does hereby indicate its intent to create a Local Revenue Options Education Advisory Committee to assist in public information efforts related to the May 6, 2008 focal Revenue Options referendum, with the Board planning to appoint Committee members and a chair, or co-chairs, at its November 5, 2007 regular meeting. This 9th day of October 2007. Attachment 3. Charge to Orange County local Revenue Options Education Advisory Committee May 6, 2008 Referendum #: Become familiar with the history that led to the 2007 General Assembly granting counties the authority to enact new local revenue options - either a .4% land transfer tax or an additional'/4-cent sales tax Become familiar with and understand the decision of the BOCC to direct the expenditure of the proposed revenue ~- Become familiar with the impact that each of the new revenues will have on Orange County residents and Orange County's revenue stream ~: Develop appropriate informational materials for the local revenue options #~ Design and implement an educational component to distribute relevant factual information about the local revenue options to Orange County voters in the most effective and efficient manner possible .,~ Design and implement a process for informational meetings with civic groups, business organizations, non-profit agencies, neighborhood associations, and other interested parties in the community ~I:. Ensure that equal access to factual information is provided to all individuals and groups, regardless of their position for or against the referendum Encourage all eligible voters to participate in the May 6, 2008 election - 8 Attachment 4. Structure of Orange County Local Revenue Options Education Advisory Committee May 6, 2008 Referendum Maximum number of representatives - 20 members Potential Representatives to Appoint to Committee 1. 1 Representative from the League of Women Voters 2. 1 Chapel Hill Carrboro City Schools parent 3. 1 Orange County Schools parent 4. 1 Non-Elected Representative from Town of Carrboro 5. 1 Non-Elected Representative from Town of Chapel Hill 6. 1 Non-Elected Representative from Town of Hillsborough 7. 1 Non-Elected Representative from City of Mebane 8. 1 Representative of realtor community 9. 1 Representative from Durham/Orange Homebuilders Association 10. 1 Representative from the UNC Student Body 11. 1 Representative from the Chapel Hill Carrboro Chamber of Commerce 12. 1 Representative from Hillsborough/Orange County Chamber of Commerce 13. 1 Representative from Agricultural Community 14. 4 At large Positions to Represent the Diversity of the Community 15. 1 Representative from Senior Community 16. 1 Representative from Non-Profit Community 17. 1 Representative from the Environmental Community