Additional Announcements
A. Decisions, Feedback & Information needed by staff
1. Audit of Engineering Division: The Council Audit Subcommittee is recommending awarding an audit of the City’s Engineering Division to Citygate Associates. Citygate Associates, established in 1990, is located in Folsom, California with 9 full-time consultants and several part-time independent consultants. The firm has specific experience in performing management and performance audits of engineering functions in several other cities. The audit scope developed by the Subcommittee and others includes 22 specific items that Citygate will include in its audit. Salt Lake City contracted with Citygate Associates in 1999, and the City Council was satisfied with the firm’s services. The audit will take about three or four months to complete and will cost $54,950. Does the Council wish to hire Citygate Associates for an audit of the Engineering Division? All Council Members were in favor.
2. ULCT Legislative Policy Committee Meeting: Council Member Love is the voting representative to the Utah League of Cities and Towns Legislative Policy Committee. She will be out of town for the Legislative Policy Committee’s next meeting, which will be this coming Monday, August 15th, at 11:45pm. As they will be discussing and then voting on whether or not to support the Single-Rate Sales Tax proposal (see attached), as well as the RDA proposal (see attached), it is important that a voting representative of the Salt Lake City Council attend. The meeting will be located at the Utah Local Government’s Trust, 55 South Highway 89, North Salt Lake. Lunch is served. Is there a Council Member willing to attend? Eric said he would attend for Jill.
Memorandum
MEMORANDUM
To: ULCT Legislative Policy Committee
From: ULCT Staff
Date: December 13, 2004
Re: 2005 Sales and Property Tax Legislation
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Last month ULCT staff informed the ULCT Tax Team and the Legislative Policy Committee of possible legislation that would involve the sales tax and the impact on local government revenues. Representative Wayne Harper, who has spearheaded discussion efforts to date, appeared before the LPC to discuss the issues.
Rep. Harper indicated his primary objective was rate simplification – the elimination of multiple sales tax rates throughout the state. He indicated that he initially had thought in terms of reducing the current 96 different rates to 29 rates, or a single rate per county. However, in his opinion, the changes necessary to accomplish that goal were virtually the same as going to a single state rate. The need to address simplification is a significant matter as the state prepares to implement the Streamlined Sales Tax System (SST) on July 1, 2006.
The issue of how to distribute the local sales tax has also been a discussion item for several years. Although not directly related to SST implementation, questions over “zoning for dollars” have prompted some efforts to reexamine the current distribution formula. Rate simplification and tax distribution were also part of Gov. Walker’s recently announced tax overhaul plan.
Rep. Harper has now proposed legislation for the upcoming 2005 session to address these issues. The purpose of this overview is to provide an outline of the key provisions as they have most recently been discussed. Please note that Rep. Harper personally has not advocated inclusion of the distribution matters. However, if he were persuaded that agreement could be reached among the cities that he would include them in a comprehensive bill.
Why is this Issue Being Considered?
There have been several very legitimate questions raised about why this issue is even being discussed at this time. In particular, is there a real need to deal with distribution matters as part of the single rate proposal?
Your answer to these questions depends entirely on your assessment of the political climate associated with these issues both in the short and long term. The first consideration is whether the entire subject, both single rate and distribution, can be deferred to provide further study. The staff view is that the single rate issue will go forward this session. There is wide support for the approach from business community. It was endorsed in the Walker proposal. Lastly, SST will start in July 2005. The single rate would need to be addressed this session.
The second question is whether issues surrounding distribution can be deferred until such time as cities develop their own distribution. In prior discussions, the general consensus was that the Utah Legislature would give us some time – but not defer examination of the issue indefinitely. Furthermore, the visibility of “big box” retailer issues will keep the distribution issue on the front burner. Simply put, if there is a need to address the matter in the near future anyway, do the political circumstances associated with the single rate argue moving forward now?
Lastly, are there some other taxation changes that cities have advocated for that could be incorporated into a comprehensive sales tax bill? One such item may be a truth-in-taxation inflation adjustment that cities, and other political subdivisions, have long argued is needed. There appears to be movement for support of such a provision provided the single rate and distribution issues could be addressed.
A Single State Rate Provision
Overview: There would a single statewide sales tax rate applicable to all transactions subject to sales tax. In order to accomplish this objective current “boutique” sales tax rates would be eliminated. The base local option rate would then be increased to provide a “hold harmless” revenue threshold for existing jurisdictions that currently impose the “boutique” levy.
Specifics
“Boutique rates” to be eliminated include the resort community tax, ZAP/RAP tax, and the city/county rural hospital tax. The resort community tax would be replaced by a gross receipts “store front” tax.
o Council Staff note: taxes such as the restaurant tax, innkeepers tax, and car rental taxes would not be changed. The argument has been that because these are collected at a limited amount of specific places, they are easier to “track” and should be treated separately. The Council may wish to enter explore other options to keep ZAP funding intact.
The current transit tax levy would be extended countywide in those counties where the transit levy currently does not operate countywide (Utah, Cache, Tooele, Box Elder and Summit). Non transit counties would be authorized to impose a sales tax levy equal to the transit tax to be used for highways.
Administrative Issues: There is need to protect revenue streams currently funding bonded indebtedness i.e. ZAP tax. However, that protection would be provided within the single statewide rate.
The “hold harmless” provision would be a dollar figure that over time would expire.
The basic local option rate would be increased to a level needed to provide hold harmless revenue.
Local Option Distribution Provision
The current sales tax distribution component now associated with the 1% basic local option tax would be modified. The 50% point of sale/50% population formula would be retained. However, there would be adjustments to reflect a true 50-50 option.
Specifics
The 50%-50% distribution currently in statute would be retained. However, the current percentage “hold harmless” provision would be replaced with a dollar figure. Eventually the value of the hold harmless would dissipate do to inflationary growth in the economy. The result would be all local sales tax revenues would now be distributed on a 50/50 basis.
Property Tax Changes
A consequence of a single statewide rate is that local governments will have for all practical purposes ceded future sales tax headroom to state government. Of necessity there will be a need for increased reliance on property tax. The current truth-in-taxation law contains incentives for taxing entities to avoid small, inflation-related property tax revenue increases. These increases are an inherent feature of sales and income taxes.
Therefore, a key component of the overall sales tax changes is the development of an “inflation” adjustment that be excluded from the truth-in taxation process. Any increases above this inflation adjustment would still be subject to the current truth-in-taxation process.
Political Issues
Assessing the politics of any major proposal is always challenging. Earlier we addressed some of the major political considerations. The following information summarizes these concerns and some additional matters.
Additional Policy/Political Considerations
1. There is considerable support for moving forward with one-rate legislation.
General discussions with key legislators
Part of the Walker tax reform plan/one aspect of the plan that could be enacted this session without impacting state revenue. The legislature would like to do something.
Strong support from business groups
Able to provide simplification for in-state businesses
2. The SST legislation scheduled to take effect on July 1, 2006 mandates that the one-rate change be enacted during the 2006 legislative session.
3. If cities could defeat the proposal now could it be delayed indefinitely? If not are we able now to achieve other policies as part of the proposal at this time?
There appears to be a general consensus that raising the local option base rate is necessary now – will it be in the future?
The inflation adjustment for truth-in-taxation can be incorporated as part of a comprehensive proposal. It is unlikely that it can be passed standing alone.
4. The sales tax distribution proposal is generally within the parameters of the existing formula. In short – it is a targeted adjustment dealing with key criticisms of the current situation rather than a drastic overhaul.
August 9, 2005
A. Decisions, Feedback & Information needed by staff
1. Hoffine Printing info: Council staff recently received notice from the Administration that it is time to consider whether to renew Hoffine Printing’s contract. Hoffine Printing provides the service of a 4-page newspaper print newsletter. Hoffine was the only vendor who submitted a proposal for newspaper print. According to Hoffine, newspaper print is recyclable as opposed to the glossy type newsletter paper. However, Council staff has encountered some previous problems working with Hoffine which raises concerns for Council staff.
Council staff has attached a cost comparison and effectiveness on different newsletter options for the Council’s consideration. Is it the Council’s interest to renew the contract with Hoffine Printing and continue with the 4-page newspaper print or would the Council prefer that Council staff continue exploring other newsletter options/vendors? Cindy said she was hearing that the Council definitely wanted to bid on newsprint and they would send that out broadly and include the Tooele Company. She said they could also get a bid on something smaller but with different paper.
2. ADDITIONAL AUDIT SUGGESTIONS: The Council Audit Subcommittee (Jill, Eric, Carlton) recommended audits of the Information Management Services (IMS) Fund and of the Golf Program. Council staff included these recommendations in budget staff reports but failed to follow up to get your definitive answer. Does the Council desire staff to obtain proposals for audits of IMS and Golf? All Council Members were in favor of the Engineering and IMS audits but not the golf audit except for Councilmember Saxton who wanted IMS and golf.
B. For Your Information
1. Attached are several grant applications the City has submitted.
2. Attached is the Quarterly Housing Report for 2004-2005, Fourth Quarter.
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Information Chart for Newsletters Cost Comparison and Effectiveness | |||
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Type of Newsletter |
Individuals who receive a copy |
Cost based on 10,000 pieces |
Effectiveness |
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8-1/2 x 11 double sided/insert with Public Utility bills |
Residents who receive a SLC public utility bill. Note: For a multi-complex, one water bill could be sent to the management, therefore there is no guarantee all tenants will receive a copy of the newsletter. |
Copy center fee (copy, folding):
Plus insert fee from Public
Utilities: |
Cost effective means to provide City information to residents knowing only residents who receive a public utilities bill would receive a copy of the newsletter. |
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Newspaper print 11x17 four pages
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Progressive Mail services conducts a specific district mailing that includes all residents and business addresses within the district. |
Hoffine Printer Fees: $633 printing
Progressive Mail: $206.80 labeling $100 district pick $1404.80 postage Total: $2344.60 |
It is Council staff’s understanding from some Council Members a four page newsletter was not the most effective way to notify residents about an upcoming town meeting. This provides a good resource to give residents updates on City issues; but does not prove to be effective when notifying residents of an upcoming town meeting. |
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11 x 17 double sided, glossy paper/mailed through Progressive Mail services as bulk mail |
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Jaffa Printing Fee:
$1099
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This is a new sized newsletter that
Council may wish to consider. |
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Post Card Mailing |
Progressive Mail services will mail to all residents/business owners within the district |
Kinko’s Fee: $1178 Progressive Mailing Fee: 12.6
cents per piece plus Administrative cost of $281 =
$1541 |
Post card mailings seem to be effective when notifying residents of an update or of an upcoming meeting. |
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Grant Submission Update Memo
TO: Rocky Fluhart, Steve Fawcett, Cindy Gust-Jenson
FROM: Grant Acquisition Team
DATE: 8/10/2005
SUBJECT: 2005 Office for Victims of Crime Training and Technical Assistance Center Grant
FUNDING AGENCY: Office for Victims of Crime (OVC)
REQUESTED AMOUNT: $1,422
DEPARTMENT APPLYING: Police Department
COLLABORATING AGENCIES: Salt Lake City, Valley Mental Health, SL County Health Dept., Primary Children’s Medical Center, State Division of Substance Abuse
DATE SUBMITTED: July 28, 2005
SPECIFICS:
Training Supplies Equipment
Personnel:
Existing New Overtime Only Requires Funding After Grant
Match Required In Kind Cash
Computer Software Development In House Contract Services (not computer)
New Program (City not performing function now)
GRANT DETAILS:
The grant will cover tuition and travel costs for one Narcotics Detective (assigned to the Methamphetamine Initiative) to attend the 2nd Annual Drug Endangered Children Conference in Washington DC.
SLC Police Detectives respond to meth labs and other drug scenes where children, who have been exposed to drugs, chemicals, and other illegal activities, are discovered. Dangers these children often experience are also physical and emotional abuse. This training is designed to provide individuals, working in these volatile situations, the most current training and best practices from experts in the field.
Grant Submission Update Memo
TO: Rocky Fluhart, Steve Fawcett, Cindy Gust-Jenson
FROM: Grant Acquisition Team
DATE: 8/10/2005
SUBJECT: 2005 COPS Technology Grant
FUNDING AGENCY: Department of Justice Office of Community Oriented Policing Services (COPS)
REQUESTED AMOUNT: $493,322
DEPARTMENT APPLYING: Police Department
COLLABORATING AGENCIES: Salt Lake City Departments: Police, Fire, Public Utilities, Public Services, CED, Airport
DATE SUBMITTED: July 5, 2005
SPECIFICS:
Training Supplies Equipment
Personnel:
Existing New Overtime Only Requires Funding After Grant
Match Required 25% In Kind Cash
Computer Software Development In House Contract Services (not computer)
New Program (City not performing function now)
GRANT DETAILS:
Salt Lake City is in the process of implementing a four stage Interoperable Communications System that will provide seamless communications across all city departments, as well as creating interoperability with other Municipalities, County and State agencies.
Salt Lake City received funding for the first phase of the system in 2002 through a Department of Justice COPS Technology grant, which was matched by the City Council. Phase one constructed a two-site, ten channel system that essentially served the Police and Fire Departments.
Phase 2 was accomplished through two years (2004 and 2005) of Homeland Security and Law Enforcement Terrorism Prevention Program monies. Phase 2 implemented simulcast on that 2 site, ten channel system.
This grant represents Phase 3 of the project, and will enhance the current system to 3 sites. This expansion makes way for the addition of Public Services, Public Utilities, and the Airport to be accommodated on the eventual 3 site, 28 channel system. (We are already in the process of making application for the grant that would fund the remaining phase of the system.
Grant Submission Update Memo
TO: Rocky Fluhart, Steve Fawcett, Cindy Gust-Jenson
FROM: Grant Acquisition Team
DATE: 8/10/2005
SUBJECT: 2005 COPS Interoperable Communications Grant Program
FUNDING AGENCY: US Department of Justice Office of Community Oriented Policing Services (COPS)
REQUESTED AMOUNT: $4,000,000
DEPARTMENT APPLYING: Police Department
COLLABORATING AGENCIES: Salt Lake City
DATE SUBMITTED: July 15, 2005
SPECIFICS:
Training Supplies Equipment
Personnel:
Existing New Overtime Only Requires Funding After Grant
Match Required 25% In Kind Cash
Computer Software Development In House Contract Services
New Program (City not performing function now)
GRANT DETAILS:
Salt Lake City is in the process of implementing a four stage Interoperable Communications System that will provide seamless communications across all city departments, as well as creating interoperability with other Municipalities, County and State agencies.
Salt Lake City received funding for the first phase of the system in 2002 through a Department of Justice COPS Technology grant, which was matched by the City Council. Phase one constructed a two-site, ten channel system that essentially served the Police and Fire Departments.
Phase 2 was accomplished through two years (2004 and 2005) of Homeland Security and Law Enforcement Terrorism Prevention Program monies. Phase 2 implemented simulcast on that 2 site, ten channel system.
Phase 3 of the project will enhance the current system to 3 sites. This expansion makes way for the addition of Public Services, Public Utilities, and the Airport to be accommodated on the eventual 3 site, 28 channel system.
This grant represents Phase 4 of the system. This is the final phase that will implement the remaining 18 channels, antennas, microwave links, and further enhancements including the relocation of the Prime Control Site from the Public Safety Building to the new airport site. All departments will maintain internal control of their systems while accomplishing seamless, interoperable radio communications. This interoperability also extends outside of Salt Lake City to surrounding Municipal, County and State Agencies, accomplishing interoperable communications statewide.
The grant represents a federal request of $4,000,000 (including a $1,000,000 local match) for the purchase of equipment and installation by Motorola. Utah Communications Agency Network (UCAN) represents $1,000,000 of that request and will pay their share of the required match ($250,000). The following is a break-out of department and agency costs for the project:
Airport = 38% $1,140,000 Total $285,000 Match – Enterprise Fund
Public Safety = 35% $1,050,000 Total $262,500 Match – General Fund
Public Services = 13.6% $ 408,000 Total $102,000 Match – General Fund
Public Utilities = 13.4% $ 402,000 Total $100,500 Match – Enterprise Fund
UCAN Project $1,000,000 Total $250,000 Match
SLC Project $3,000,000 Total $750,000 Match
Total Project $4,000,000 Total $1,000,000 Match