HomeMy WebLinkAboutAgenda - 09-06-2022; 6-b - Acknowledgement and Reaffirmation of Uses for the Proceeds from the Article 46 Sales Tax 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 6, 2022
Action Agenda
Item No. 6-b
SUBJECT: Acknowledgement and Reaffirmation of Uses for the Proceeds from the Article
46 Sales Tax
DEPARTMENT: Economic Development &
County Manager's Office
ATTACHMENT(S): INFORMATION CONTACT:
1) April 5, 2011 Resolution Calling Travis Myren, Deputy County Manager,
For a November 8, 2011 Special (919) 245-2308
Advisory Referendum Concerning Steve Brantley, Economic Development
the Levy of a One-Quarter Cent Director, (919) 245-2326
(1/4¢) County Sales and Use Tax
2) June 21, 2011 Resolution
Regarding Uses of Potential
Revenues from a One-Quarter
Cent (1/4¢) County Sales and Use
Tax
3) December 5, 2011 Resolution
Levying an Additional One-Quarter
Cent County Sales and Use Tax in
Orange County
4) Proposed Resolution Dated
Regarding Continued Uses of
Revenues from a One-Quarter
Cent (1/4¢) County Sales and Use
Tax
PURPOSE: To approve a new Resolution regarding the Economic Development portion of the
Article 46 One-Cent (1/4¢) optional sales and use tax approved by voters on November 8, 2011;
and confirm Orange County's continued commitment to fund economic development and public
school capital needs for the next ten years, originally evidenced by the Resolution approved by
the Board on June 21, 2011.
BACKGROUND: On April 5, 2011 the Board of County Commissioners adopted a Resolution
calling for a Special Advisory Referendum to be held on November 8, 2011 concerning the levy
of a One-Quarter-Cent County Sales and Use Tax (Attachment 1).
On April 19, 2011 the Board of Commissioners adopted A Resolution Regarding Uses of a
Potential Revenues from a One-Quarter Cent (1/4¢) County Sales and Use Tax. The resolution
established a ten-year commitment to allocate 50% of the funding to the County's two school
systems and 50% of the funding to Economic Development initiatives.
2
On June 21, 2011 the Board of Commissioners approved an updated Resolution regarding uses
of potential revenues from a One-Quarter Cent (1/4¢) County Sales and Use Tax (Attachment 2).
Below are the initial categories identified for the 50% Economic Development portion of the
funding.
Focus Area Percentage of Funds Estimated Annual
Expenditures
Debt Service on 60% $750,000
Infrastructure
• Installation of backbone water and sewer infrastructure in Economic
Development Districts
• Fiber optic availability for non-residential development as appropriate
• Approximately 60% of allocated funds will be used for debt service annually for
the next 10 years
Collaborative Outreach 1.5% $15,000 - $20,000
• Marketing and prospect recruitment, including trade shows targeted to specific
business clusters
• Collaborative development projects with municipal partners
• Industry Appreciation events allowing Orange County industries the opportunity
to network with other businesses and local and state officials
• Development of a Local "Economic Health" Summit, providing a regular update
of the County's Economic Development programs and provide an assessment
of the County's economic health
collateral Materials 1.5% $20,000
• Creation of materials inventory to support marketing efforts, both in
cooperation with our municipal partners and stand-alone materials
• Update Orange County Economic Development's online presence
Innovation Space 5-10% $75,000 - $125,000
• Foster the local growth of university-affiliated entrepreneurs
• Support transition from university to private sector, such as providing lease
subsidies
• Work with municipal and/or university partners to identify specific areas of
targeted assistance
Agriculture Economic 2-20% $25,000 - $250,000
Development
• Provide limited capital support to PFAP for processing equipment that can add
value to Orange County farm products
• Provide support to local farmers to strengthen their product marketing and
promotion
• Continue to develop support network for new farmers
• Provide assistance for food entrepreneurs that have graduated from PFAP
Business Investment 8% $100,000
Grant
• Facilitate marketing Orange County to prospective businesses
• Client support for site preparation, relocation assistance, or site investigations
• Competitive pursuit of tar eted projects
Small Business Loan T0-16% Up to $200,000 for the first
Program few years
• Start-up capital and expansion funds for Orange County small businesses
3
• Collaborate with local economic development partners (municipalities,
chambers of commerce) to extend the program's reach
Establishment of 501c (4) 12-16% Up to $200,000 for several
entity years
• Explore the feasibility of creating public-private stand-alone economic develop
entity
On November 16, 2011 the Orange County Board of Elections certified to the Board of County
Commissioners that, in said advisory referendum held on November 8, 2011, 10,749 ballots
(60.68%) were cast FOR and 6,965 ballots (39.32%) AGAINST the levy of the additional one-
quarter cent (1/4¢) County Sales and Use tax in the County.
On December 5, 2011 the Orange County Board of Commissioners adopted a Resolution to
approve uses of Article 46 revenue to fund economic development and public school capital needs
for an initial ten years (Attachment 3).
A Special Revenue Fund was established to receive and account for the One-Quarter Cent 1/4¢)
County Sales and Use Tax. The funds have remained separate from the County's General Fund
to allow for more accurate tracking of revenues and expenditures in accordance with the initial
ten-year allocation plan. Collections for the initial ten-year period have been as follows:
2012 - $709,663.25
2013 $21732,717.94
2014 $2,859,674.61
2015 $3,000,536.84
2016 $3,215,661.88
2017 $3,535,129.93
2018 $3,725,492.96
2019 $3,987,946.55
2020 $3,674,507.75
2021 $4,318,897.26
$1,282,154.63
2022 (Partial Reporting)
Total $26,367,339.01
During the 2012 to mid-year 2022 period, Orange County Schools and Chapel Hill Carrboro City
Schools have received 50% or $13,183,669.51 of the total Article 46 revenues.
As the initial ten-year period for Article 46 funding has expired, the following categories for the
Economic Development portion of Article 46 funding are being proposed. It is anticipated that
the Education portion of Article 46 will remain as outlined in the original Resolution.
Focus Area Estimated Annual Expenditures
Debt Service on Utility
Infrastructure $881,720
Examples include: Installation of backbone water and sewer infrastructure in the
Economic Development Districts
Economic Development
Partnerships $272,000
4
Examples include: Economic Development Summit, Chambers of Commerce Dues,
UPROAR Art Festival, Collaborative Outreach with Municipalities, Durham Technical
Community College's Small Business Program, Research Triangle Regional
Partnership Dues
Entrepreneurship $325,500
Examples Include: Launch Inc. Innovation Center, Eno Mill Arts Incubator, Piedmont
Food Processing Center
Agriculture Economic
Development
$195,340
Examples Include: Agriculture Summit, Breeze Farm Contribution, Farm App, Partial
Funding of Agriculture Economic Developer Position, Agriculture Grant Program
Business Financial
$825,000
Programs !"
ro rams
Examples Include: Business Investment Grants, Company Incentives
Economic Development
Operations $502,894
Examples Include: Economic Development Department Budget, County Indirect
Costs
Workforce Development $250,000
Examples Include: Durham Tech Promise (Scholarships), Durham Tech Back-to-
Work Initiative
Estimated Annual Expenditures are based on the FY 2022-23 Budget and available Economic
Development Article 46 reserves. Actual expenditures will vary year-over-year based on Sales
and Use Tax collections and Board of County Commissioners' approved budgets.
EconomicAdopted Uses of Development
7 for FY i
Debt Service on Infrastructure $881,720
Innovation Center— "Launch Chapel Hill" $73,500
Agricultural Grants $100,000
Business Investment Grants $150,000
Agriculture Summit $5,000
Economic Development Summit $30,000
Durham Tech Promise (Scholarships) $200,000
Durham Tech Back-to-Work Initiative $50,000
Breeze Farm Contribution $10,000
Arts Incubator $10,000
Farm Application $3,600
Economic Development Department Budget for FY 22-23 $355,502
5
Indirect Costs associated with Economic Development $147,392
Department, as per County's Cost Allocation Plan
County's 75% share of Agricultural Economic Development $76,740
Position — now in Cooperative Extension Department
Chamber Dues $7,646
Total $2,101,100
Adopted of Article 46 Reserve Funds • 1Amount
Incentives —Wegmans & ABB $675,000
Capital Pay-Go for Piedmont Food Processing Center HVAC $242,000
Replacements
Beacon Public Arts Festival $50,000
Durham Tech Small Business Program $70,000
Collaborative Outreach $60,000
Research Triangle Regional Partnership $50,000
Chamber Dues $4,354
Total $1,151,354
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to
this item:
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal
impact associated with this item.
Any environmental impact within the Economic Development Districts will be appropriately
reviewed and determined by Orange County Planning and Inspection Department's adherence to
the County's Unified Development Ordinance, and the State of North Carolina's environmental
regulations.
RECOMMENDATION(S): The Manager recommends that the Board approve and authorize the
Chair to sign the attached Resolution reaffirming Orange County's commitment to economic
development and public school capital needs for a period of ten additional years.
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION CALLING FOR A NOVEMBER 8, 2011 SPECIAL ADVISORY
REFERENDUM CONCERNING THE LEVY OF A ONE-QUARTER CENT (1/4¢)
COUNTY SALES AND USE TAX
WHEREAS, the North Carolina General Assembly has enacted the "One-Quarter
Cent (1/4¢) County 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 local sales and use tax; and
WHEREAS, in order to le the local sales and use
tax the County of
levy ty Orange
must conduct an advisory referendum in accordance with the provisions of the
North Carolina General Statutes Section 163-287;
NOW, THEREFORE, BE IT RESOLVED by the Orange County Board of
Commissioners that:
Section 1: In accordance with the North Carolina General Statutes, a special
advisory referendum is hereby called to be held between the normal time the
polls are open on Tuesday, November 8, 2011, at which there shall be submitted
to the qualified voters of the County of Orange the question set forth in Section 3
of this Resolution.
Section 2: The Orange County Board of Elections shall conduct said
Referendum.
Section 3: The ballot question shall be in the following form:
[ ] FOR [ ] AGAINST
Local sales and use tax at the rate of one-quarter percent (0.25%) in addition
to all 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.
Section 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 Resolution shall take effect upon its passage.
ADOPTED this the 5th day of April , 2011.
qj Es
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 $2,500,000
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 between 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, the Board of Commissioners establishes a ten-year commitment to allocate
Article 46 one-quarter cent (1/4¢) County sales and use tax proceeds as follows:
a. 50% of the funding will be allocated in an equitable manner between the County's two
school systems, based on the Average Daily Membership of each school system, for
the dedicated purpose of funding capital projects, including but not limited to facility
improvements at `older' schools and the procurement of technology. The Board
requests that each school system furnish the Board of Commissioners with a detailed
list of prioritized projects that could be completed with anticipated funding over the
next ten years. The Board will evaluate the projects and approve a ten-year plan
which will be incorporated into the County's Capital Investment Plan. As part of the
Capital Investment Plan annual review, progress will be evaluated annually and
adjustments made according to needs agreed upon by the School Boards and Board
of County Commissioners;
b. 50% of the funding will be allocated to Economic Development initiatives
generally as shown on the attached chart and the Board of Commissioners will
approve a ten-year Economic Development Plan as part of the County's Capital
Investment Plan; and
8
WHEREAS, 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
and economic development initiatives; and
WHEREAS, to distinguish and separate the revenues produced through this Y4 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 not supplant funding for the
Board's endorsed funding target of 48.1% for annual spending on both school systems. The
funds will remain separate from the County's general fund to allow for more accurate tracking
of revenues and expenditures in accordance with initial ten-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 and public school capital needs for a period of ten
years, with a scheduled implementation date of April 1, 2012.
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 21St day of June, 2011.
Bernadette Pelissier, Chair
Orange County Board of Commissioners
PROPOSED ECONOMIC DEVELOPMENT USES OF SALES TAX PROCEEDS 9
Focus Area Percentage Estimated Example Activities Frequency
g p q Y
of Funds Annual
Expenditures
Debt Service on C0% $750,000 • Installation of water and sewer infrastructure in Annually for 10 years
Infrastructure EDDs
Collaborative 1.5% $15,000 - $20,000 • Trade shows targeted to specific industry Annually for 10 years;
Outreach clusters amount of funding will
• Industry Appreciation events businesses vary
• Local "Economic Health" Summit
Collateral Materials 1.5% $20,000 • Updated Internet interface Funding only required
• Utilization of appropriate social media tools every 2 to 3 years
•
Development of informative brochures
Innovation Space 5 - 10% $75,000 - • Up fit of a county-owned innovation space Funding will vary with site
$125,000 Rent subsidies and/or leasehold improvements improvement
on privately owned leasable space requirements
Agricultural 2 -20% $25,000 - • Focused counseling for food-based businesses 10 years,but funding will
Economic $250'000 graduating from PFAP vary with program
Development • Creation of a'culinary kitchen' facility to requirements
provide facilities for PFAP graduates
Business 8% $100,000 • Advanced site preparation 10 years,but funding will
Investment Grants • Relocation assistance vary with project
Small Business 0% - 16% Up to $200,000 • Start-up capital and expansion funds for Orange After several years,
Loan Program for next few County small businesses program will be self
sufficient
years
Establishment of 12- 16% Up to $200,000 • Develop public-private stand alone economic Expenditures in Years 2—
501c (4) entity for several years develop entity 5 for start up funding
1 Reflects the percentage of economic development funds,rather than overall funds
Sales Tax Initiative- Orange County Economic Development June 13, 2011
DRAFT Page 1 of 1
�a11-l07 10
ORANGE COUNTY BOARD OF COMMISSIONERS
A Resolution Levying an Additional One-Quarter Cent (1/4¢) County Sales and Use Tax
in Orange County
WHEREAS, Article 46 of Chapter 105 of the North Carolina General Statutes (NCGS Sections 105-535
through 105-538) authorizes the Board to levya One-Quarter Cent (1/4¢) County Sales and Use Tax in
the County, subject to an subsequent to the affirmative vote of a majority of those voting in an advisory
referendum held by the County on the question of whether to levy such local sales and use tax in the
County as required by NCGS 105-537; and
WHEREAS, in connection therewith, the Board has heretofore directed the Orange County Board of
Elections to conduct an advisory referendum on such question, which advisory referendum was held on
November 8, 2011; and
WHEREAS, the Board of Elections has certified to the Board that, in said advisory referendum, the
ballots were cast 10,749 (60.68%) FOR and 6,965 (39.32%) AGAINST the levy of the additional One-
Quarter Cent (1/4¢) County Sales and Use Tax in the County; and
WHEREAS, NCGS 105-537 permits the Board, after public notice of its intent to do so, to adopt a
resolution levying the additional One-Quarter Cent (1/4¢) County Sales and Use Tax in the County;
and which notice was published at least 10 days before the date of this meeting; and
WHEREAS, the Board has determined that the levy of the additional One-Quarter Cent (1/4¢) County
Sales and Use Tax in the County is necessary to fund significant pressing school facility and
technology needs, and infrastructure improvements needed for economic development initiatives;
NOW, THEREFORE, BE IT RESOLVED by the Orange County Board of Commissioners as follows:
Section 1. There is hereby levied within the County the additional One-Quarter Cent (1/4¢) County
Sales and Use Tax authorized by Article 46 of Chapter 105 of the NCGS (Sections 105-535 through
105-538).
Section 2. Collection of the additional One-Quarter Cent (1/4¢) County Sales and Use Tax by the
North Carolina Secretary of Revenue shall begin on April 1, 2012 and continue thereafter.
Section 3. The net proceeds of the additional One-Quarter Cent (1/4¢) County Sales and Use Tax
levied hereby shall be distributed by the Secretary of Revenue to Orange County in accordance with
Article 39 Chapter 105 of the North Carolina General Statutes. Notwithstanding the provisions of Article
39 of Chapter 105, the additional One-Quarter Cent (1/4¢) Sales and Use Tax shall not apply to the
sale of food that is exempt from the tax pursuant to NCGS 105-164.13B. The Secretary shall not divide
the amount allocated to Orange County between Orange County and the municipalities within Orange
County.
Section 4. The publication of the Notice of Intent to Adopt Resolution levying the additional One-
Quarter Cent (1/4¢) Sales and Use Tax in Orange County is hereby ratified and approved.
Section 5. This resolution shall take effect immediately upon its adoption. A certified copy of this
resolution shall be forwarded to the Secretary of the North Carolina Department of Revenue, P.O. Box
25000, Raleigh, NC 27640, along with a certified copy of the Board of Education results from the
advisory referendum.
ADOPTED this the 5th day of December, 2011. Gf'
Bernadette Pelissier, Chair
Orange County Board of Commissioners
11
RES-2022-041 Attachment 4
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION
A Resolution Regarding Continued Uses of Revenues from a One-Quarter Cent
(1/4¢) County Sales and Use Tax
WHEREAS, there remain significant pressing infrastructure, economic development, and
school needs; and
WHEREAS, it is important to provide Orange County taxpayers with alternatives to the
property tax to address these needs; and
WHEREAS, the levy of an Article 46 one-quarter cent (1/4¢) County sales and use tax
has provided the County with a revenue source that is now generating over $4,000,000
annually for the County; and
WHEREAS, it is important for Orange County to continue to invest in future economic
development that will enable the County to recruit, retain, grown, and generate
businesses and jobs that are desirable; and
WHEREAS, it is important for Orange County to meet public school needs; and
WHEREAS, the Board of Commissioners establishes a new ten-year commitment to
allocate Article 46 one-quarter cent (1/4¢) County sales and use tax proceeds as follows:
a. 50% of the funding will continue to be allocated between the County's two school
systems on the basis of average daily membership for the dedicated purpose of
funding capital projects, including but not limited to facility improvements and the
procurement of technology. The Board requests that each school system furnish
the Board of Commissioners with a detailed list of prioritized projects that could be
completed with anticipated funding over the next ten years. The Board will evaluate
the projects and a ten-year plan which will be incorporated into the County's
Capital Investment Plan. As part of the Capital Investment Plan annual review,
progress will be evaluated annually and adjustments made according to needs
agreed upon by the School Boards and Board of County Commissioners.
b. 50% of the funding will be allocated to Economic Development initiatives including
but not limited to: funding utility infrastructure in the Economic Development
Districts needed to recruit and locate new businesses, business financial programs
to promote the recruitment, retention and expansion of new and existing
businesses, innovation centers to provide space for new start-up businesses,
funding support for the County's agriculture businesses, and funding to support
workforce development needs; and
12
WHEREAS, to distinguish and separate the revenues produced through this '/4 cent sales
tax, a Special Revenue Fund will continue to be utilized to receive and account for the
sales tax revenue. These funds will continue to remain separate from County's general
funds to allow for more accurate tracking of revenues and expenditures in accordance
with a new ten-year allocation plan established as part of this resolution;
NOW, THEREFORE, BE IT RESOLVED the Orange County Board of Commissioners
hereby states its intent to continue to use the revenues from the Article 46 one-quarter
cent (1/4¢) County sales and use tax for continued economic development and public
school needs for an additional ten years.
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 6th day of September, 2022.
Renee Price, Chair
Orange County Board of Commissioners
Laura Jensen, Clerk to the Board