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HomeMy WebLinkAbout03-04-04 La Porte Development Corporation Minutes MINUTES OF THE LA PORTE DEVELOPMENT CORPORATION March 4, 2004 1. Call to Order/Introductions President Pat Muston called the meeting to order at 5:01 p.m. Present: Ed Matuszak, Chuck Engelken, Bill Love, Pat Muston, Peter Griffiths and Deborah Johnson Members Absent: Bruce Meismer due to illness. Others Present: City Secretary Martha Gillett, Assistant City Manager/Finance Director Cynthia Alexander, Assistant City Manager John Joerns and Assistant City Secretary Sharon Harris 2. Oath of Office - there was no Oath of Office to administer due to the absence of Councilmember Meismer. It will be administered at the next meeting. 3. Consider approval of Minutes of Meeting of January 26,2004 Chuck Engelken made a motion to approve the minutes as presented. Second by Ed Matuszak. Motion carried unanimously. Ayes: Pat Muston, Chuck Engelken, Bill Love, Ed Matuszak, Deborah Johnson and Peter Griffiths Nays: None Abstain: None 6. The Corporation took the agenda out of order due to a conflict of Assistant City Manger John Joerns. The closed the regular meeting and adjourned to Executive Session at 5:30 and returned to the table at 6:05. There was no action taken in Executive Session. EXECUTIVE SESSION - PURSUANT TO PROVISION OF THE OPEN MEETINGS LAW, CHAPTER 551.071 THROUGH 551.087, TEXAS GOVERNMENT CODE, (CONSULTATION WITH ATTORNEY, DELIBERATION REGARDING REAL PROPERTY , DELIBERATION REGARDING PROSPECTIVE GIFT OR DONATION, PERSONNEL MATTERS, DELIBERATION REGARDING SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION OF ANOTHER WITNESS IN AN INVESTIGATION, DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS. 551.086 - (Economic Development) - Meet with Assistant City Manger to discuss economic development. 7. Considerations and Possible Action on Items Considered in Executive Session Motion was made by Deborah Johnson to approve incentive package to Team Industry subiect to public hearing, review required by the 4B legislation, and final approval of the 4B Corporation subject to assurances that the noise would not have a substantial impact on the community and with specific information to be requested of Team Industries. Second by Bill Love. Motion carried unanimously. Ayes: Pat Muston, Ed Matuszak, Chuck Engelken, Peter Griffiths, Bill Love and Deborah Johnson Nays: None Abstain: None 4. Receive 9/30/03 Audit Report Assistant Finance Director Michael Dolby provided an overview of the audit report included in the meeting packet. 5. Receive Current Budget Report Assistant Finance Director Michael Dolby provided an overview of the current budget report provided in the meeting packet. 6. Review FY 2003-2004 Adopted budget Assistant City Manager/Finance Director Cynthia Alexander noted a Financial Report will be presented at the next meeting. 8. Administrative Reports There were no administrative reports to be presented. 9. Board Comments Board Member Ed Matuszak provided comments regarding a Marina and related legislation. It was requested Cynthia Alexander research the legislation and provides a report at the next meeting. 9. Adjournment There being no further business to come before the Development Corporation Peter Griffiths made a motion to adjourn and Chuck Engelken seconded. The meeting was duly adjourned at 6:20 P.M. Respectfully submitted, '-1!I~d~1 Martha A. Gillett City Secretary/La Porte Development Corporation Secretary P7t 7~pprov~s 2.~ rd day Of~, 2004. ,J.: -r) n'l / /;f;T7~ r c U Ii ' !/i/v&-1 t.... ,~ Pat Muston, President MINUTES OF THE LA PORTE DEVELOPMENT CORPORATION March 4, 2004 1. Call to Order President Pat Muston called the meeting to order at 5:01 p.m. Present: Ed Matuszak, Chuck Engelken, Bill Love, Pat Muston and Deborah Johnson Members Absent: Bruce Meismer due to illness. Others Present: City Secretary Martha Gillett, Assistant City Manager/Finance Director Cynthia Alexander, Assistant City Manager John Joerns and Assistant City Secretary Sharon Harris 2. Oath of Office - there was no Oath of Office to administer due to the absence of Councilmember Meismer. It will be administered at the next meeting. 3. Consider approval of Minutes of Meeting of January 26, 2004 Chuck Engelken made a motion to approve the minutes as presented. Second by Ed Matuszak. Motion carried unanimously. Ayes: Pat Muston, Chuck Engelken, Bill Love, Ed Matuszak, Deborah Johnson and Peter Griffiths Nays: None Abstain: None 4. The Corporation took the agenda out of order due to a conflict of Assistant City Manger John Joerns. The closed the regular meeting and adjourned to Executive Session at 5:30 and returned to the table at 6:05. There was no action taken in Executive Session. EXECUTIVE SESSION - PURSUANT TO PROVISION OF THE OPEN MEETINGS LAW, CHAPTER 551.071 THROUGH 551.087, TEXAS GOVERNMENT CODE, (CONSULTATION WITH ATTORNEY, DELIBERATION REGARDING REAL PROPERTY, DELmERATION REGARDING PROSPECTIVE GIFT OR DONATION, PERSONNEL MATTERS, DELIBERATION REGARDING SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION OF ANOTHER WITNESS IN AN INVESTIGATION, DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS. 551.086 - (Economic Development) - Meet with Assistant City Manger to discuss economic development. 7. Considerations and Possible Action on Items Considered in Executive Session Motion was made by Deborah Johnson to approve incentive package to Team Industry subiect to public hearing. review required bv the 4B legislation. and final approval of La Porte Development Corporation - 1/26/04 - Page 2 the 4B Corporation subiect to assurances that the noise would not have a substantial impact on the community and with specific information to be requested of Team Industries. Second by Bill Love. Motion carried unanimously. Ayes: Pat Muston, Ed Matuszak, Chuck Engelken, Peter Griffiths, Bill Love and Deborah Johnson Nays: None Abstain: None 4. Receive 9/30/03 Audit Report Assistant Finance Director Michael Dolby provided an overview of the audit report included in the meeting packet. 5. Receive Current Budget Report Assistant Finance Director Michael Dolby provided an overview of the current budget report provided in the meeting packet. 6. Review FY 2003-2004 Adopted budget Assistant City Manager/Finance Director Cynthia Alexander noted a Financial Report will be presented at the next meeting. 8. Administrative Reports There were no administrative reports to be presented. 9. Board Comments Board Member Ed Matuszak provided comments regarding a Marina and related legislation. It was requested Cynthia Alexander research the legislation and provides a report at the next meeting. 9. Adjournment There being no further business to come before the Development Corporation Peter Griffiths made a motion to adjourn and Chuck Engelken seconded. The meeting was duly adjourned at 6:20 P.M. Respectfully submitted, Martha A. Gillett City Secretary/La Porte Development Corporation Secretary Passed and approved on this day of ,2004. MINUTES OF THE LA PORTE DEVELOPMENT CORPORATION March 4, 2004 1. Call to Order/Introductions President Pat Muston called the meeting to order at 5:01 p.m. Present: Ed Matuszak, Chuck Engelken, Bill Love, Pat Muston, Peter Griffiths and Deborah Johnson Members Absent: Bruce Meismer due to illness. Others Present: City Secretary Martha Gillett, Assistant City Manager/Finance Director Cynthia Alexander, Assistant City Manager John Joerns and Assistant City Secretary Sharon Harris 2. Oath of Office - there was no Oath of Office to administer due to the absence of Councilmember Meismer. It will be administered at the next meeting. 3. Consider approval of Minutes of Meeting of January 26, 2004 Chuck Engelken made a motion to approve the minutes as presented. Second by Ed Matuszak. Motion carried unanimously. Ayes: Pat Muston, Chuck Engelken, Bill Love, Ed Matuszak, Deborah Johnson and Peter Griffiths Nays: None Abstain: None 6. The Corporation took the agenda out of order due to a conflict of Assistant City Manger John Joerns. The closed the regular meeting and adjourned to Executive Session at 5:30 and returned to the table at 6:05. There was no action taken in Executive Session. EXECUTIVE SESSION - PURSUANT TO PROVISION OF THE OPEN MEETINGS LAW, CHAPTER 551.071 THROUGH 551.087, TEXAS GOVERNMENT CODE, (CONSULTATION WITH ATTORNEY, DELmERATION REGARDING REAL PROPERTY, DELmERATION REGARDING PROSPECTIVE GIFT OR DONATION, PERSONNEL MATTERS, DELmERA TION REGARDING SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION OF ANOTHER WITNESS IN AN INVESTIGATION, DELmERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS. 551.086 - (Economic Development) - Meet with Assistant City Manger to discuss economic development. 7. Considerations and Possible Action on Items Considered in Executive Session Motion was made by Deborah Johnson to approve incentive package to Team Industry subiect to public hearing. review required bv the 4B legislation. and final approval of the 4B Corporation subiect to assurances that the noise would not have a substantial impact on the community and with specific information to be requested of Team Industries. Second by Bill Love. Motion carried unanimously. Ayes: Pat Muston, Ed Matuszak, Chuck Engelken, Peter Griffiths, Bill Love and Deborah Johnson Nays: None Abstain: None 4. Receive 9/30/03 Audit Report Assistant Finance Director Michael Dolby provided an overview of the audit report included in the meeting packet. S. Receive Current Budget Report Assistant Finance Director Michael Dolby provided an overview of the current budget report provided in the meeting packet. 6. Review FY 2003-2004 Adopted budget Assistant City Manager/Finance Director Cynthia Alexander noted a Financial Report will be presented at the next meeting. 8. Administrative Reports There were no administrative reports to be presented. 9. Board Comments Board Member Ed Matuszak provided comments regarding a Marina and related legislation. It was requested Cynthia Alexander research the legislation and provides a report at the next meeting. 9. Adjournment There being no further business to come before the Development Corporation Peter Griffiths made a motion to adjourn and Chuck Engelken seconded. The meeting was duly adjourned at 6:20 P.M. Respectfully submitted, ~~~~I Martha A. Gillett City Secretary/La Porte Development Corporation Secretary P~sed ~ approved on this UJ rd day of ~, 2004. +2W~ Pat Muston, President Proposed Debt Issuance Series 2004 Certificates Of Obligation $6,300,000 _E';'-]] -----_ _-iZc;----Z-'-1 -_ _-:;--'7'] ... _c;.cXT21 -_ 2004 Certificate of Obligation Fund Summary (Potential Series) PROJECT NAME Bay Area Boulevard Canada Road Paving and Drainage 4,400,000 1.900.000 Total 2004 Certificate of Obligation Fund 6,300,000 Bay Area Boulevard These funds will be utilized for the City's share of this major roadway extension from Fairmont Parkway to Spencer Highway. An agreement with Harris Country stipulates a 50/50 sharing of the costs associated with this project. Design of this project has been completed by Harris County. Right-of-way acquisition is a component the City has agreed to undertake. $4,400,000 c.:..c....;.._.c;.;....:.J ... ~'.~~:. T J . n_ _-::::~] _ _"~=:=i.J - _ Canada Road Paving and Drainage These funds will be utilized to design and construct Canada Road from Fairmont Parkway to Spencer Highway. The Roadway will be four-lane concrete with curb and gutter and underground storm sewer. Major components of this project, other than the road itself, include right-of-way acquisition, pipeline adjustments, and power line adjustments. Harris County has agreed to participate in this project up to 1.75 million dollars. $1,900,000 _'}J~=Ej] ..... _2:"=:2--J __ __ c>.J .--_ _I.i.En liliiii ~ La Porte is a City on thetmove, a City with the vision, the foresight, the strength, and the commitment to move forward. Bulk Rate U.S. Postage PAID Permit #23 La Porte, TX 77571 .. tD Op~ality 1 1999 ~. .~ _ 1 The Past In 1984 the City of La Porte adopted a Comprehensive Plan, a document that out- lined the populace's vision for the City. In 1985 the voters, by a large majority, approved $25 million in projects to implement some of the key elements of the Plan. Some of the capital improvements included Bay Forest Golf Course, the La Porte Recreation & Fitness Center, East "E" Street Improvements, the Little Cedar Bayou Park Complex and Wave Pool, Fire Station Number Two, Northwest Park, the Fire Training Facility, Water Distribution and Sewer Collection and Treatment Facilities all of which have enhanced the quality of life for La Porte residents. Tbe Present City Council has selectedJanuary 1~ 1999, as the date for an election to com- plement and continue the much-needed capital improvements required by the City to grow progressively. The ballot will contain proposals for a Section 4B 1/2 Cent Sales Tax, and the issuance of General Obligation Bonds. Sales tax revenue is paid by everyone who purchases anything in our City limits. So, every- one who makes a purchase will contribute to the projects funded by this very minimal tax. The Future If the voters approve, the Section 4B Sales Tax is expected to generate about $750,000 in revenue per year. The projected revenue will allow the sale of bonds which will enable the City to build a new library on land donated to the City, to replace the 32 year old library that we have outgrown. These bonds would also allow the City to complete the Bay Area Boulevard "missing link" between Fairmont Pkwy. and Spencer Hwy. Just as you borrow money from the bank for big projects, cities sell bonds for the same reason. Bonds issued by a Section 4B corporation would be repaid by future revenues generated by the sales tax. General Obligation Bonds are backed by the current 0.71 cent property tax rate, which will not increase if the propositions are approved. There are five propo- sitions on the ballot for capital improvements that are needed now. Approval of these five propositions will allow a $3.925 million sale of bonds. Again, there would be NO NEED for a property tax increase to pay for these bonds. Proposition 1 would fInance $1,500,000 for expansion and renovation of portions of City Hall. Since it was built, the population of La Porte has grown from 12,899 (1978) to over 33,500; and the number of employees housed in the building has more than doubled. Proposition 2 e. would fInance $750,000 for a Fire Station on the South side of La Porte, to replace the . . aging station currently being leased from the City of Shoreacres with a modern facility . capable of providing for future growth. Proposition 3 would Imance $750,000 for a Fire Station on the NW side to replace the aging station in Lomax. The station needs to be replaced with a modern facility capable of housing cur- rent and future staff and equipment. Proposition 4: would Imance $675,000 for paving 5th Street, a major artery connecting Main St. and _ Barbour's Cut. This project should positively affect traffic and pedestrian patterns in .. the northern portion of the City, while promoting redevelopment. Proposition 5 would Imance $250,000 for replacement of the 38 year old San Jacinto Swimming Pool at Central Park. The replacement pool will be a new state-of-the-art pool, similar to the Northwest Park Pool. Cast your vote and help der'l7de La Porte~s future.. , !Ii /l/ Ii z Ii -~ ./" ,'l.; 'j.f} < .~. '" if .c City of La Porte La Porte Development Corporation (038) Fund Summary (Section 4B Sales Tax) Working Capital 9/30/03 2,499,218 Plus Estimated 03-04 Revenues 936,403 Less 03-04 Expenditures and Commitments 1,259,498 Equals Estimated Working Capital 9/30/04 2,176,123 Plus 04-05 Revenues: 1/2 Cent Sales Tax Interest Income 965,000 41,070 Total Revenues 1,006,070 Equals Total Resources 3,182,193 Less 04-05 Expenditures: Debt Service Transfer Contingency 280,050 Total Expenditures 280,050 Equals Estimated Working Capital 9/30/05 2,902,143 Revenues Expenditures & Commitments Estimated Fund Balance Usage Estimated 2003-04 936,403 1,259,498 (323,095) Projected 2004-05 1,006,070 280,050 726,020 City of La Porte La Porte Development Corporation Fund (038) Statement of Revenues Actual Budget Revised Proj ected Object Description 2002-03 2003-04 2003-04 2004-05 Charges for Services: 403.02-00 1/2 Cent Sales Tax 921,625 929,880 902,261 965,000 Charges for Services Subtotal 921,625 929,880 902,261 965,000 Interest: 483.01-00 Interest Income 34,209 33,910 34,142 41,070 Interest Subtotal 34,209 33,910 34,142 41,070 Total La Porte Development Corp Fund Revenues 955,834 963,790 936,403 1,006,070 2003 CERTIFICATES OF OBLIGATION BONDS PROJECT SUMMARY (POTENTIAL SERIES) Project Name Bay Area Boulevard Canada Road $ Cost 4,400,000 1,900,000 TOTAL 2003 CERTIFICATES OF OBLIGATION PROJECTS $ 6,300,000 Bay Area Boulevard Project Number: GEN901 Fiscal Year 03-04 Funding: $ 4,400,000 These funds will be utilized for the City's share of this major roadway extension from Fairmont Parkway to Spencer Highway. An agreement with Harris County stipulates a 50/50 sharing of the costs associated with this project. Design of this project has been completed by Harris County. Right-of-way acquisition is a component the City has agreed to undertake. Canada Road Paving and Drainage Project Number: GEN902 Fiscal Year 03-04 Funding: $ 1,900,000 These funds will be utilized to design and construct Canada Road from Fairmont Parkway to Spencer Highway. The roadway will be four-lane concrete with curb and gutter and underground storm sewer. Major components of this project, other than the road itself, include right-of-way acquisition, pipeline adjustments, and power line adjustments. Harris County has agreed to participate in this project up to 1.75 million dollars. Economic Development Sales r~ (96-302) Page 1 of8 W[;';[lOW' 0;'; ST:'JI GO\ 'ERN;"lE.\ T C."'ROl.E KEETO\ STRAYHORN T<:::\:3, ComplTlIlI<::r of Public .-\CC.)I.Int;; SEARCH ~ Texas Taxes Tax Pu blications EconoInic DevelopInent Sales Tax June 2004 Voters in many Texas cities have the option of imposing a local sales and use tax to help finance their communities' economic development efforts. These cities may adopt an economic development sales tax rate of 1/8, 1/4,318 or 1/2 of 1 percent if the new total rate of all local sales and use taxes would not exceed 2 percent. They also may limit the duration of the tax and the use of the funds. Who is eligible? ~4A Sales Tax All cities located in a county with a population ofless than 500,000 may impose the tax under ~4A if the new combined local sales tax rate would not exceed 2 percent. Some cities located in counties with a population of 500,000 or more (Bexar, Dallas, El Paso, Harris, Hidalgo, Tarrant and Travis), also may use ~4A for economic development efforts but a city's eligibility varies from county to county. For information on which cities are eligible in these counties, call the Comptroller's Local Government Assistance section toll free at 1-800-531-5441, ext. 3-4679. ~4B Sales Tax As of2001, all cities are eligible to adopt the ~4B tax ifthe combined local sales tax rate would not exceed 2 percent. How is the tax administered? Development Corporations Under both ~4A and ~4B, the Development Corporation Act has a unique provision that requires cities to establish a corporation to administer the sales and use tax funds. The corporation must file articles of incorporation with the Secretary of State. The articles of incorporation must state that the corporation is governed under Vernon's Ann.Civ.St. art. 5190.6, ~4A or art. 5190.6, ~4B of the Development Corporation Act of 1979. Board of Directors http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _ 302 .html 8/1712004 Economic Development Sales T~ (96-302) Page 2 of8 The composition of the corporation's board of directors and the length of a member's term differ between ~4A and ~4B. Under ~4A: The city's governing body must appoint a five-member board. Each member is appointed to a term not to exceed six years. Under ~4B: The city's governing body must appoint seven directors. Three of the seven directors cannot be employees, officers or members of the city's governing body. The other four directors may be - but are not required to be - members of the governing body or city employees. All directors are appointed to a two-year term under ~4B. The directors of a corporation authorized under ~4B must be residents of the city authorizing the sales tax if the city's population is 20,000 or more. There is no city residency requirement for ~4B directors in cities with fewer than 20,000 population as long as the director is a resident of the county in which the majority of the city is located, or resides within 10 miles of the city and is in a county which borders the county in which a majority of the city is located. The board of directors authorized under ~4A and ~4B serves at the pleasure of the governing body and must conduct meetings within the city's boundaries. A corporation's registered agent must be a Texas resident, and the corporation's registered office must be within the city's boundaries. How can tax revenue be used? ~4A Sales Tax The tax is primarily intended for manufacturing and industrial development, and cities may use the money raised by this sales tax to acquire land, buildings, equipment, facilities, expenditures, targeted infrastructure and improvements for purposes related to: . manufacturing and industrial facilities, recycling facilities, distribution centers, small warehouse facilities; . research and development facilities, regional or national corporate headquarters facilities, primary job training facilities for use by institutions of higher education, job training classes; . a general aviation business service airport that is an integral part of an industrial park; . certain infrastructure improvements, which promote or develop new or expanded business enterprises; . port-related facilities to support waterborne commerce; and . maintenance and operating costs associated with projects. After a public hearing and voter approval, g4A corporations may use their revenue to undertake projects eligible under g4B, without voting to abolish the g4A tax and impose the g4B tax. The law specifies the g4A corporation's requirements for publishing notice of a proposed g4B project and the procedures for holding at least one public hearing on the proposed project before the election. The ballot must clearly describe the g4B projects that will be funded from the g4A tax. ~4A corporations may, following a separate election to gain voter approval, spend their g4A http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _ 302 .html 8/1712004 Economic Development Sales W (96-302) Page 3 of8 sales tax to clean up contaminated project sites. A corporation created under ~4A cannot assume, or pay principal or interest on, debts that existed before the city created the corporation. ~4B Sales Tax The tax provides cities with a wider range of uses for the tax revenues because it is intended to give communities an opportunity to undertake a project for quality of life improvements, including economic development that will attract and retain primary employers. Cities may use money raised by this sales tax for a wide variety of projects including land, buildings, equipment, facilities expenditures and improvements related to projects defined in Section 2 of the Act (same uses as authorized for ~4A) or found by the board of directors to be required or suitable for use for: . professional and amateur sports (including children's sports) and athletic facilities; tourism and entertainment facilities; convention and public park purposes and events, (including stadiums, ballparks, auditoriums, amphitheaters, concert halls, parks and open space improvements, museums, exhibition facilities); . related store, restaurant, concession, parking and transportation facilities; . related street, water and sewer facilities; and . affordable housing. To promote and develop new and expanded business enterprises that create or retain primary jobs, a city may provide: . public safety facilities; . recycling facilities; . streets and roads; . drainage and related improvements; . demolition of existing structures; . general municipally owned improvements; . maintenance and operating costs associated with projects; and . any other project that the board determines will contribute to the promotion or development of new or expanded business enterprises that create or retain primary jobs. Before spending g4B sales tax revenue, a corporation is required to hold at least one public hearing on the proposed project that will be funded by this tax. ~4B corporations may, following a separate election to gain voter approval, spend their ~4B sales tax for a water supply, water conservation program or to clean up contaminated project sites. Reporting Requirements of ~4A and ~4B Corporations The 1997 Legislature added g4C to the Development Corporation Act requiring ~4A and g4B corporations to file an annual report with the Texas Comptroller of Public Accounts by February 1. The report must include the corporation's economic development objectives, total revenues and expenditures for the preceding fiscal year, a breakdown of these expenditures and a list of the corporation's assets. The report form and instructions for http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _ 302 .html 8/1712004 Economic Development Sales T~ (96-302) Page 4 of8 submitting the report are available through the Comptroller's office or online at: http://www.window.state.tx.us/lagal edcform.html. The Comptroller will use this information to report to the Legislature each biennium about the use of ~4A and ~4B sales tax revenues to encourage economic development. Can you undertake projects outside city limits? An economic development corporation may undertake projects outside city limits so long as it is clear that the city benefits from the project. If a city undertakes a project outside its limits, it must receive permission to do so from the governing body of the entity with jurisdiction in that area. For example, if a city locates a project beyond city limits, it should receive approval from the county's commissioners court. How do you impose the tax? City voters must approve this special, dedicated tax - just like all other sales tax options. Call for an Election Cities may call for this election in two ways: . the governing body may call an election on its own; or . the city must call for the election if petitioned by at least 20 percent of the number of voters who cast ballots in the most recent regular municipal election. The city's governing body must adopt an ordinance calling for the election at least 62 days before it is held. The election must be held on one of the uniform election dates according to V.T.C.A., Election Code ~41.001: . the first Saturday in February; . the first Saturday in May; . the second Saturday in September; or . the first Tuesday after the first Monday in November. How long is the tax effective? Under ~4A A tax approved without a limit on its duration is effective until repealed by an election. A city may call an election to repeal the tax in the same way as an election to change the rate of the tax. A tax imposed for a specified period expires at the end of that period. A city imposing a tax for a specified period may extend the period or reimpose the tax after its expiration date only with voter approval. A tax for a specific project expires when all debts related to the project and obligations from http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _302 .html 8/17/2004 Economic Development Sales Tax. (96-302) Page 5 of8 the tax proceeds have been paid in full. A tax imposed for a specific project may also be reimposed by an election. Under ~4B The S4B tax is effective until the city notifies the Revenue Accounting, Tax Allocation Section of the Comptroller's Office to stop collecting the tax. A city can, on its own action or as a result of an election, dissolve a S4B corporation. A city must continue assessing the tax until all obligations incurred by the corporation, including principal and interest on bonds, are satisfied. What about tax increases or tax decreases? Initiating Ordinance If a city is already imposing a tax under this Act, the city's governing body may adopt an ordinance calling for an election to increase or reduce the tax rate. The ordinance may be initiated in either of two ways: . by a majority vote of the governing body; or . by petition of registered voters. Petition Requirements In order to change the rate ofa S4A tax, 10 percent or more of the registered voters, must petition the city to call an election for that purpose. Procedures for tax rate changes are not addressed under S4B, however, general provisions of the Tax Code for calling an election may be used. Under these provisions, the city council must call an election if a number of qualified voters of the municipality equal to at least 20 percent of the number of votes cast in the most recent regular municipal election petitions the governing body for a vote. Certifying Petitions If the election to adopt or change the tax rate is by petition, the governing body must determine if the petition is sufficient within 30 days of receiving it. If the petition is sufficient, the city must adopt the ordinance calling for the election within 60 days after receiving it. (Refer to V.T.C.A., Tax Code S321.402) Required Tax Rate Changes As with adoption, the sales and use tax must be increased or decreased in increments of 1/8 of 1 percent with a minimum of 1/8 of 1 percent and a maximum of 1/2 percent. However, a city may not adopt a tax rate resulting in a combined rate of all local sales and use taxes exceeding 2 percent. Reducing or Abolishing a ~4A Tax and Adopting a ~4B Tax If a city wants to hold an election to reduce or abolish its S4A sales tax and adopt a sales tax under S4B, the city may address the two issues in a single ballot proposition. http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _ 302 .html 8/17/2004 Economic Development Sales T~ (96-302) Page 6 of8 Ballot Language for the Economic Development Sales Tax Under ~4A Following is ballot language specified under ~4A of the Development Corporation Act: 1. For a city to adopt, increase or reduce the tax, the bal/ot must state: The adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of of one percent. (Insert 1/8, 1/4, 3/8 or 1/2 as appropriate for the proposed tax rate.) 2. A city may also hold an election to adopt, increase, reduce or repeal the ~4A sales tax and the sales tax to reduce the property tax rate on the same ballot: The adoption of a sales and use tax within the city for the promotion and development of new and expanded business enterprises at the rate of of one percent (insert 1/8, 1/4, 3/8 or 1/2 as appropriate for the proposed tax rate) and the adoption of an additional sales and use tax within the city at the rate of of one percent to be used to reduce the property tax rate. (Insert 1/8, 1/4, 3/8 or 1/2 as appropriate for the proposed tax rate.) 3. A city may also allow a vote on a ballot proposition limiting the length of time a sales and use tax may be imposed. The following language should be added to # 1 : to be imposed for years. 4. A city may also indicate a specific project on the ballot to be funded with the sales tax revenue. In this case, a description ofthe project is substituted in #1 or #2 in place of the following ballot language: new and expanded business enterprises. 5. For a city to repeal, the ballot should state: Dissolution of the (name of development corporation). Under ~4B The Development Corporation Act does not provide specific ballot language for ~4B. City officials should consult with their city attorneys when drafting the ballot language under this section. When do tax collections and allocations start? Certifying Election Results If voters approve the tax, the governing body must adopt a resolution or ordinance declaring http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _302 .html 8/17/2004 Economic Development Sales W (96-302) Page 7 of8 the election results in meeting minutes not earlier than the third day, nor later than the sixth day, following the election. The city secretary must send the certified copy of the resolution or ordinance with the election results to the Revenue Accounting, Tax Allocation Section of the Comptroller's office. The information sent to the Comptroller must include: . the date the election was held; . the proposition voted on; . number of votes cast for adoption; . number of votes cast against adoption; . number of votes by which the proposition was approved; and . a statement that the proposition did pass. The law states that the Comptroller's office must receive this information from the city secretary through U.S. certified or registered mail. The Comptroller's office will later notify the city secretary when it is ready to handle the administration of the tax. Effective Date The tax becomes effective after one complete calendar quarter elapses from the date the Comptroller's office receives notification of voter approval. For example, if voters approve the tax in February 2004, and the Comptroller's office receives notification in March, then the tax becomes effective on July 1,2004, after the calendar quarter of April-May-June has elapsed. The Comptroller's office will notify area merchants to begin collecting the new tax rate on July 1. The city will then begin receiving revenue from the tax in September 2004. Propositions and Effective Dates for a ~4A Tax or ~4B Tax With a Tax to Reduce the Property Tax Rate If a city wants to adopt the S4A sales tax and a sales tax to reduce the property tax rate in the same election, the city may address them in a single ballot proposition. If the proposition passes, the sales tax to reduce the property tax rate must take effect on October 1 after one complete calendar quarter has elapsed. The S4A tax would start at the beginning of the first calendar quarter after the completion of one full calendar quarter. If a city wants to adopt a sales tax under S4B and a sales tax to reduce the property tax rate in the same election, the city must address them as two separate ballot propositions. If voters approve both of these propositions, they both become effective on October 1. Method of Payment The Comptroller's office will issue a payment for the total city tax and a letter with the first payment (that includes the economic development sales tax) with instructions explaining how to calculate the portion due the city and what is due the development corporation. After a city receives the sales and use tax revenues from the Comptroller's office, the city must deliver the revenue to the development corporation. Need more information on the economic development sales tax? Comptroller representatives can provide presentations on matters related to the local sales http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _302 .html 8/17/2004 Economic Development Sales W (96-302) Page 8 of8 tax, including S4A and S4B sales taxes. Representatives can also meet in forums with city officials and the public to help them assess possible effects of the tax on their local communities, including effects on revenue. For more information about the sales tax, or to request a speaker to present information about the sales tax to your community, call toll free 1-800-531-5441, ext. 3-4679. Need More Assistance? Email us at tax. help@cpa.state.tx.us. Call us toll free. Visit one of our local field offices. In compliance with the Americans with Disabilities Act, this document may be requested in alternative formats by calling one of our toll-free numbers listed above, 512/475-0900 (FAX), or 1-800-RELAY-TX (TDD). 96-302 (09/2003) Carole Keeton Strayhorn Texas Comptroller of Public Accounts Window on State Government CQ!lti3cU.!~ Privacy and Security Policy http://www.window.state.tx.us/taxinfo/taxpubs/tx96 _302 .html 8/17/2004 ~ City of La Porte Interoffice Memorandum From: Mayor Pro Tempore and City Council ~\ Debra Brooks Feazelle, City Manager ()-- July 2, 2004 6 To: Date: Subject: Audit Committee & La Porte 4B/Development Corporation Board I have recently polled City Council Members who are also members of the Audit Committee and the La Porte 4B/Development Corporation Board in an attempt to schedule both entities' quarterly meetings on a non-conflicting schedule; so as to afford Council members the opportunity to attend both meetings. It is mandatory for the Audit Committee to meet quarterly to receive the annual investment report, as well as, any other business that comes on their agenda. Typically these meetings would be regarding Tax/Sale information and usually take no more than 30 minutes. However, the last few Audit Committee meetings have lasted quite a bit longer due to the senior citizen tax requests and the City Council Travel Policy. Now that both of these issues have been resolved and are behind us, the committee meetings should be no longer than 30 minutes. After visiting with Chairman Chuck Engelken, the Audit Committee will start scheduling their meetings on the 2nd City Council Meeting of April, July, October, and January. In the event something large comes up on the Agenda, staff will notify the chairman and a special meeting will be called as necessary. Audit Committee Members polled: Chairman Chuck Engelken Member Howard Ebow Alternate Member Peter Griffiths Alternate Member Barry Beasley Note: There is a member vacancy due to James Warren's passing that needs to be filled after the July 24th election. After polling the La Porte 4B/Development Corporation Board President Pat Muston and the below City Council members who are also LPDCB representatives, it was decided if they meet quarterly they will schedule their meetings on the 2nd City Council Meeting of March, June, September, and December 4BIDevelopment Corporation Representatives polled: Chuck Engelken Peter Griffiths Note: Former Councilman Bruce Meismer was not polled. Page 2 The last La Porte 4B/Development Corporation Board meeting was in March 2004. They did not have a meeting in June, as they had nothing to vote on. Hopefully a catch-up meeting can be scheduled in July, possibly first City Council Meeting, 7/12/04, so as not to conflict with the Audit Committee's meeting. Staff Liaison for the Audit Committee and the La Porte 4B/Development Corporation Board will be Cynthia Alexander. As the Audit Committee is a full Council and legal committee, Martha Gillett or her assistant will serve as secretary. Martha is also secretary for the official La Porte 4B/Development Corporation Board. Please advise if there are any other changes that need to be made. I hope this resolves any confusion as we move forward. Thank you. DBF/db c: John Joerns Cynthia Alexander Martha Gillett Pat Muston, President La Porte 4B/Development Corporation Board