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HomeMy WebLinkAboutresolution.council.013-13 RESOLUTION NO. 13 (Series of 2013) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF ASPEN AND THE ASPEN SCHOOL DISTRICT REGARDING THE 0.3% SALES TAX FOR EDUCATIONAL PURPOSES. WHEREAS, on November 6, 2012, the electors of the City approved a sales tax increase of three-tenths of one percent (0.3%), with the funds derived from such tax increase to be used for educational purposes (the "Tax Increase"); and WHEREAS, the City Council has made a legislative determination, as ratified by the citizens in the November 6, 2012 election, that imposing a tax and distributing that tax for educational purposes is a valid municipal purpose; and WHEREAS, the City Council has also determined and the voters have approved the collection of such sales tax by the City and that it is appropriate and desirable to disburse the funds generated by the 0.3% sales tax for educational purposes to the Aspen Public Education Fund that is created pursuant to an Intergovernmental Agreement between the Aspen School District RE-1. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, THAT: Section 1. The City Council of the City of Aspen hereby approves Intergovernmental Agreement between the City of Aspen and the Aspen School District regarding the 0.3% sales tax for educational purposes. Section 2. The Mayor is hereby authorized to execute the Intergovernmental Agreement between the City of Aspen and the Aspen School District regarding the 0.3% sales tax for educational purposes. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 28d'day of January, 2013. Michael C. Ireland, Mayor L _ 3o .Z I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the day hereinabove stated. Kathryn S. , City Clerk INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF ASPEN AND THE ASPEN SCHOOL DISTRICT REGARDING THE 0.3% SALES TAX FOR EDUCATIONAL PURPOSES This Agreement is entered into effective as of the day of , 2013, by and between the City of Aspen, Colorado, a body corporate and politic organized under and existing by virtue of the laws of the State of Colorado, hereinafter referred to as "City," and the Aspen School District RE-1, Pitkin County, Colorado, a political subdivision of the State of Colorado organized under and existing by virtue of the laws of the State of Colorado, hereinafter referred to as "School District." WITNESSETH WHEREAS, the City and School District believe that the provision of quality educational programs is one of the most critical needs in the Aspen area; and WHEREAS, Article XIV, Section 18(2)(a) of the Colorado Constitution supports the cooperation or contracting by or among any of its political subdivisions to provide any function, service or facility lawfully authorized to each of the cooperating or contracting units, including without limitation, the sharing of costs, the imposition of taxes, or the incurring of debt; and WHEREAS, C.R.S. Sections 29-1-201 and 203 permit and encourage government entities to make the most efficient and effective use of their powers and responsibilities by cooperating and contracting with other governmental entities to provide any function, service, or facility lawfully authorized to each, including the sharing of costs; and WHEREAS, C.R.S. Section 29-1-202(2) defines political subdivisions to include cities and school districts; and WHEREAS, C.R.S. Section 22-32-122 grants to school districts the power to contract with a city for the performance of any service, activity, or undertaking which any school district may be authorized by law to perform or undertake; and WHEREAS, Article XI, Section 7 of the Colorado Constitution provides that no provision of said Constitution shall be construed to prevent the State or any political subdivision from giving direct or indirect financial support to any political subdivision as may be authorized by general statutes; and WHEREAS, funds received by the School District through the operation of C.R.S. Section 30-28-133 are inadequate to finance the educational programs desired by our community; and WHEREAS, Article XII of the Charter of the City authorizes the City Council to levy and impose taxes and to spend general funds for municipal purposes, provided that any new sales tax or increase in the rate of any existing sales tax has been approved by the qualified electors of the City at a regular or special election; and WHEREAS, it is within the legislative discretion of the City Council to determine that providing financial assistance to the School District is a municipal or public purpose; and WHEREAS, having a well-funded and strong educational system within the community assists the City's economic development efforts; and WHEREAS, the existence of quality educational programs benefits not only the school children who live here, but also improves the quality of life in Aspen; and WHEREAS, on November 6, 2012, the electors of the City approved a sales tax increase of three-tenths of one percent (0.3%), with the funds derived from such tax increase to be used for educational purposes (the "Tax Increase"); and WHEREAS, the City Council has made a legislative determination, as ratified by the citizens in the November 6, 2012 election, that imposing a tax and distributing that tax for educational purposes is a valid municipal purpose; and WHEREAS, the City Council has also determined and the voters have approved the collection of such sales tax by the City and that it is appropriate and desirable to disburse the funds generated by the 0.3% sales tax for educational purposes to the Aspen Public Education Fund, as described below, which has the expertise, community support and volunteers to accomplish that task in a professional and community-minded environment while maintaining the highest standards of accountability for the expenditure of those tax dollars; and WHEREAS, this Agreement is intended to formalize the arrangement between the City and the School District for the payment and utilization of the funds derived from the Tax Increase approved by the electors on November 6, 2012. NOW, THEREFORE, in consideration of the mutual promises set forth herein, and pursuant to the authority contained in Article XIV, Section 18(2)(a) of the Constitution of the State of Colorado, it is agreed by and between the City and the School District as follows: SECTION 1. SUBMISSION OF TAX INCREASE PROPOSAL TO VOTERS The City adopted the necessary ordinance and resolution as required to submit to the qualified electors of the City the question of an increase in the rate of the City sales tax from 2.1% to 2.4% for the purpose of supporting local, public K-12 education as provided for herein. The Tax Increase was approved by the electors in the City of Aspen on November 6, 2012, for educational purposes. SECTION 2. QUESTION SUBMITTED The question approved by the qualified electors in the November 6, 2012, general election included, in addition to raising the City sales tax rate, sufficient authorization under Article X, Section 20 of the Colorado Constitution to increase the City's revenues to permit the collection of the additional sales tax as well as authorization to increase the City's expenditures so as to permit the City to pay over the proceeds collected to the Aspen Public Education Fund. SECTION 3. TERM The question as submitted to the qualified electors provided that the increased sales tax shall automatically decrease by 0.3% and thus terminate on December 31, 2016, unless the qualified electors of the City authorize an extension. This Agreement shall terminate two years following the termination of the 0.3% sales tax, unless further extended by the parties. The intent of the parties in extending the term of this Agreement for two years beyond the termination of the sales tax is to allow for the completion of the funding of existing grants and to wrap up the affairs of the Aspen Public Education Fund. This section shall be in effect unless this Agreement is otherwise terminated pursuant to other provisions set forth below. SECTION 4. CREATION OF THE ASPEN PUBLIC EDUCATION FUND a. The Aspen Public Education Fund ("Fund") will be formed to act as the recipient and disburser of the designated sales tax revenues. The Fund will be a Colorado nonprofit corporation and will operate exclusively for educational and charitable purposes pursuant to Section 501(c)(3) of the Internal Revenue Code. The Fund will be governed by a Board of Directors consisting of seven (7) persons: the initial directors shall be those listed in the ballot question approved by the electors on November 6, 2012. Vacancies on the Board of Directors shall be filled by appointment by the Fund's Board of Directors, in accordance with its Bylaws. b. The Fund shall remain in good standing as a Colorado nonprofit corporation and shall maintain its designation as an Internal Revenue Service organization qualified under Section 501(c)(3) as an educational and charitable organization. If for any reason the Fund shall either (a) fail to maintain its good standing as a Colorado nonprofit corporation after reasonable efforts, or (b) lose its designation under IRS Section 501(c)(3) as an educational and charitable organization after reasonable efforts to maintain that designation, the Fund shall notify the City of such change in status, and the City may terminate this Agreement and seek another re-granting agency for the 0.3% sales tax. The City shall consult with the School District as to the successor entity and the City shall not enter into an agreement with a successor entity without the consent of the School District. The City shall extend all reasonable opportunity to the Fund to correct either of the two situations set forth in the preceding sentence prior to terminating this Agreement. c. The Fund shall provide copies of its current Articles of Incorporation and Bylaws, and, unless a longer period is required, its IRS designation of the Fund as a 501(c)(3) entity, to the City within sixty (60) days of the effective date of this Agreement, and further promises to provide copies of any amendments to the Articles of Incorporation or Bylaws as those may be amended from time to time. d. To the extent that this Agreement creates or imposes rights and obligations upon the Fund, the City and School District agree to make compliance with this Agreement a condition precedent to the organization of the Fund and to its eligibility to receive monies derived from the City's collection of the 0.3% sales tax. SECTION 5. PAYMENT OF TAX INCREASE PROCEEDS TO FUND AND ADMINISTRATIVE FEE a. The City, on a monthly basis, shall pay over to the Fund the revenue collected as a result of increasing the City's sales tax from 2.1% to 2.4%, less an administrative fee, as described in Section 5(c), which may be retained by the City. The monies paid over to the Fund shall be deposited in an interest bearing account or accounts to be maintained by the Fund. The City shall be obligated to pay over to the Fund only revenue actually collected, less the Administrative Fee discussed below. The City shall make reasonable efforts to collect all outstanding sales taxes owing to the City. b. The City will charge the Fund for reprinting costs for Code Changes and for its share of the Elections Costs. c.. The City will deduct from the revenue collected an Administrative Fee (Fee) equal to two percent (2.0%) of the total revenue collected from the 0.3% sales tax for educational purposes. The Fee is intended to include, without limitation, all ongoing costs related to revenue collection efforts, a share of billing and mailing costs and a share of accounting, collection costs, vendors fee and additional auditing efforts. SECTION 6. USE OF TAX INCREASE PROCEEDS a. The monies remitted to the Fund shall be used exclusively for educational purposes providing support to the School District and for the costs associated with administering the Fund, insuring the payment and receipt of the monies, and retaining its 501(c)(3) status, which expenditures shall include, without limitation, costs for preparing annual tax returns for the Fund and preparing annual audit reports for the Fund. The Fund shall make every reasonable effort to keep the costs of administration at a minimal level to ensure the maximum use of the tax revenues for educational purposes. b. Monies deposited in the Fund shall be accounted for separately, shall not be commingled with any gifts, and shall be maintained in a separately numbered bank account to assure separate accounting. An annual audit report shall be prepared by the Fund setting forth the source and disposition of all payments and the Fund shall cause the report to be filed with the City, and an executive summary or similar consolidated report (which may be prepared by the Fund and does not have to be prepared by its auditors) to be made available to the public on a website maintained by the Fund or the City or both. The audit report shall be completed and tendered to the City no later than 180 days following the end of the fund's fiscal year of operations, which is July 1 to June 30. In addition, the Fund and its accountants or auditors or both shall provide such additional financial information as the City Finance Director may reasonably request from time to time. The parties acknowledge that the expenditure of public funds requires the highest degree of transparency so that the public maintains confidence in the integrity of the system. SECTION 7. INDEMNIFICATION To the extent permitted by law, the Fund shall indemnify and hold the City and the School District, their officers, employees and agents, harmless from claims related to the receipt and expenditure of monies under this Agreement, and shall provide an executed agreement to that effect to the City and the School District. SECTION 8. AMENDMENT This Agreement may be amended only by the mutual agreement of the parties and shall be evidenced by a written instrument authorized and executed with the same formality as this Agreement. SECTON 9. NOTICE If notice, including any documents, is required to be delivered to the City or the Fund by the other party, notice, or delivery of any documents, shall be deemed completed upon delivery of the notice or document to the following: If to the City: Copies to the City Manager, the City Attorney, and the City Finance Director by hand delivering the notice and/or document to their respective offices located at: 130 So. Galena, Aspen, Colorado 81611 If to the Fund: Notices and documents should be hand delivered to Jeanne C. Doremus at 418 E. Cooper Avenue, Aspen, CO 81611 AND to: Richard E. Bump, attorney for the Fund, at: Caplan and Earnest LLC 1800 Broadway, Suite 200, Boulder, CO 80302 SECTION 10. DISPUTE RESOLUTION If the City, by and through the City Council, and after receiving reports from the City Manager, City Attorney, or Finance Director, concludes in it sole discretion that there are significant irregularities in any financial reporting, including financial statements or audits, or that the Fund is deviating from the use of the sales tax increase proceeds as approved by the voters, the City may, after Notice to the Fund, and the expiration of ten (10) days during which time the Fund has not corrected such irregularity or deviation, unilaterally withhold payments to the Fund of the tax revenue collected until such time as the City and the Fund have resolved any issues as to any such irregularities or deviations. Such withholding shall be in an amount reasonably necessary to correct such irregularity or deviation. In the event the City notifies the Fund of any perceived irregularities or deviations, the parties agree to submit any and all disagreements as to the operation of the Fund to Mediation. A qualified mediator shall be selected jointly by the Parties. In the event of such mediation, all costs of the mediation shall be paid from the administrative fee retained by the City and described in paragraph 5(c), above. The City may be represented by City Staff and the Fund by members of its board or support staff and advisors, or both. SECTION 11. SEVERABILITY If any section, paragraph, subparagraph, phrase, sentence, or portion of this Agreement is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision, and such holding shall not affect the validity of the remaining portions of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Intergovernmental Agreement Regarding Sales Tax to be in full force and effect the day and year first above written. APPROVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, this day of , 2013. I-3d —2c;l Michael C. Ireland, Mayor, City of Aspen ATTEST: Kathyrn Koc ity Clerk APPROVED BY THE BOARD OF DIRECTORS OF THE ASPEN SCHOOL DISTRICT RE-1, PITKIN COUNTY, COLORADO, this 28th day of January, 2013. Charla Belinski, President Aspen School District Board of Directors ATTEST: Angela Rittenhou , Secr tary to the Aspen School District Board of Directors 4821-3521-9218,v. 2