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HomeMy WebLinkAboutordinance.council.075-92 ORDINANCE NO. 7~ (Series of 1992) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AMENDING ORDINANCE NO. 81 (SERIES OF 1989) IMPOSING A .45% MUNICIPAL SALES TAX WITHIN THE CITY FOR AFFORDABLE HOUSING AND DAY CARE SO AS TO ESTABLISH NEW SEPARATE AFFORDABLE HOUSING AND CHILD CARE FUNDS FOR REVENUES DERIVED FROM THE .45% SALES TAX. WHEREAS, on February 13, 1990, the electorate of the City of Aspen approved the adoption of Ordinance No. 81 (Series of 1989), imposing a .45% sales tax upon the sale of tangible personal property and/or the furnishing of services within the city; and WHEREAS, as approved and mandated by the electorate, all revenues derived from the .45% sales tax are and have been dedicated to and expended for the purpose of creating affordable housing and day care opportunities within the city of Aspen and Pitkin County; and WHEREAS, pursuant to Section 4.3 of Ordinance No. 81 (Series of 1989), the City Council may amend said ordinance except as to the per centum rate of tax and the "earmarking" of revenues as provided for therein without submitting such amendment(s) to the electorate for its approval; and WHEREAS, the City Council desires to amend Ordinance No. 81 (Series of 1989) so as to specify and distinguish that percentage of revenues derived from the .45% sales tax that shall be used to fund affordable housing and that percentage of revenues that shall be used to fund day/child care opportunities; and WHEREAS, the city Council desires to establish separate child care and affordable housing funds into which revenues from the .45% sales tax shall be deposited; and WHEREAS, the City Council finds that the public health, safety and welfare will be served by the designation of those separate portions of the .45% sales tax revenues that should and shall be used to fund affordable housing and child care services and the establishment of special funds into which affordable housing and day care monies shall be deposited. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AS FOLLOWS: Section 1 Ordinance No. 81 (Series of 1989) is hereby amended at Section 5, "Expenditures and Earmarking of Revenues", so as to provided as follows: "Section 5. Expenditures and Earmarkinq of Revenue. All revenue from this retail sales tax collected by the City of Aspen in any fiscal year shall be set aside in two separ- ate funds: (1) the 'Affordable Housing Fund' and (2) the 'Child Care Fund'. Each fund shall receive percent ( %) of the total revenues generated and collected by the sales tax commencing January 1, 1993. The monies of said funds shall be expended by the City Council for the purposes of creating public or private affordable housing and child care opportunities, respectively, within Aspen and Pitkin County, including, but not by way of limitation, capital improvements and capital expenditures therefor, land acqui- sition, payment of indebtedness incurred in connection with any affordable housing or child care expenditure, reserves, and for expenditures necessary to protect any such property acquired or capital improvements constructed or purchased from any and all threatened or actual damages, loss, destruction or impairment from any such cause or occurrenc- Section2 Article II, "Sales Tax", of Chapter 21, "Taxation", of the Municipal Code of the City of Aspen, Colorado, is hereby amended by the addition of new Division 3, "Affordable Housing Fund", and new Division 4, "Child Care Fund", such amendments to read as follows: DIVISION 3. AFFORDABLE HOUSING FUND. Sec. 21-14-1. Purpose. Pursuant to the vote of the elec- torate of the City of Aspen on February 13, 1990, authoriz- ing the imposition of a .45% sales tax upon the sale of tangible personal property at retail or the furnishing of services in the City of Aspen, the revenue from which is to be used exclusively to create public or private affordable housing and day care opportunities within the City of Aspen and Pitkin County, there is hereby established the Afford- able Housing Fund into which are to be deposited so much of the .45% sales tax revenues as set forth in this Division. All monies deposited in the Affordable Housing Fund shall be used solely to create and/or fund public or private afford- able housing within the City of Aspen and Pitkin County, including, but not limited to, the funding of capital im- provements and capital expenditures therefor, land acquisi- tion, payment of indebtedness, the funding of reserves, and such expenditures as necessary to protect and preserve affordable housing properties or improvements. Sec. 21-14-2. Funding. Commencing January 1, 1993, the Affordable Housing Fund shall receive percent %) of all revenues collected and paid to the City under the .45% municipal sales tax for affordable housing and day care. City Council may authorize such additional funding from other sources for deposit into the Affordable Housing Fund as it may deem necessary from time to time. Sec. 21-14-3. Interest -- Other Income. All interest or other income earned or generated by monies in the Affordable Housing Fund shall accrue exclusively to the Fund and may only be expended in accordance with the limitations as set forth in Sec. 21-I4-1 of this Division. 3 Section 21-14-4. Investments Authorized. The Director of Finance is authorized to invest Affordable Housing Funds, without distinction between principal and income, in any security, bond, note, stock, debenture, mortgage or other investment as specified in C.R.S. Section 24-75-601.1, as may be amended. Investments may be made for those periods of time or with such dates of maturity as deemed prudent by the Director of Finance. All investments of Affordable Housing Funds shall be governed by the standard for invest- ments as described at C.R.S Section 15-1-304. DIVISION 4. CHILD CARE FUND. Sec. 21-15-1. Purpose. Pursuant to the vote of the elec- torate of the city of Aspen on February 13, 1990, authoriz- ing the imposition of a .45% sales tax upon the sale of tangible personal property at retail or the furnishing of services in the City of Aspen, the revenue from which is to be used exclusively to create public or private affordable housing and day care opportunities within the City of Aspen and Pitkin County, there is hereby established the Child Care Fund into which are to be deposited so much of the .45% sales tax revenues as set forth in this Division. All monies deposited in the Child Care Fund shal~ be used solely to create and/or fund public or private child care services within the City of Aspen and Pitkin County, including, but not limited to, the funding or lending of funds for capital improvements and capital expenditures therefor, the funding of reserves, the funding or lending of funds for child care facility operating expenses, scholarship/tuition assistance, and such expenditures as necessary to protect and preserve child care services or facilities. Sec. 21-15-2. Funding. Commencing January 1, 1993, the Child Care Fund shall receive percent ( %) of all revenues collected and paid to the City under the ~45% municipal sales tax for affordable housing and day care. City Council may authorize such additional funding from other sources for deposit into the Child Care Fund as it may deem necessary from time to time. Sec. 21-15-3. Interest -- Other Income. All interest or other income earned or generated by monies in the Child Care Fund shall accrue exclusively to the Fund and may only be expended in accordance with the limitations asset forth in Sec. 21-15-1 of this Division. Section 21-15-4o Investments Authorized. The Director of Finance is authorized to invest Child Care Funds, without 4 distinction between principal and income, in any security, bond, note, stock, debenture, mortgage or other investment as specified in C.R.S. Section 24-75-601.1, as may be amend- ed. Investments may be made for those periods of time or with such dates of maturity as deemed prudent by the Direc- tor of Finance. The Director of Finance may also invest Child Care Funds in loans secured by a mortgage for the construction or purchase of affordable housing within the City of Aspen by financially qualified full-time city resi- dents regardless as to whether such loan is otherwise se- cured or guaranteed by the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, or other federal or state home mortgage lending agency. All investments of Child Care Funds shall be governed by the standard for investments as described at C.RoS Section 15-1- 304° Sec. 21-15-5. Child Care Fund Investment Committee. (A) There is hereby created a Child Care Fund Investment Committee composed of members who shall be appointed and serve at the pleasure of the city coun- cil. Committee members shall meet the eligibility requirements as provided for in Section 8.2 of the Home Rule Charter and serve a term of two (2) years unless earlier removed. Initial appointments to the committee shall provide for over-lapping tenures. (B) The Child Care Fund Investment Committee shall assist and advise the Director of Finance in the selection of investments for Child Care Fund monies and shall review and approve all applications for affordable housing loans to be made from the Child Care Fund. The commit- tee, subject to the approval and ratification by the city council, shall also devise and implement loan eligibility and qualification policies and standards governing affordable housing loans made from the Child Care Fund. Such loan policies and standards shall be reviewed on an annual basis. Section 3 All monies currently held in the City's existing "Affordable Housing/Day Care Fund" as of the date of final adoption of this ordinance, and all revenues collected from the .45% "Affordable Housing/Day Care Sales Tax" from the date of final adoption to 5 and until December 31, 1992, shall be divided and separately deposited into the Affordable Housing Fund and the Child Care Fund, respectively, in accordance with the following formula: From To Housing Child Care Existing Affordable Housing/ Day Care Fund % __% .45% sales tax revenues % % After December 31, 1992, all revenues collected pursuant to the .45% affordable housing/day care sales tax shall be deposited in the Affordable Housing Fund and Child Care Fund as provided for in this ordinance in accordance with the formula as set forth in Section 1 above. Section 4 This ordinance shall not have any effect on existing litiga- tion and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be construed and concluded under such prior ordinances. Section 5 If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. Section 6 A public hearing on the ordinance shall be held on the day of , 1992, in the City Council Chambers, Aspen City Hall, Aspen, Colorado. INTRODUCED, READ AND ORDERED PUBLISHED as provided by law by the City Council of the City of Aspen on the day of , 1992. John S. Bennett, Mayor ATTEST: Kathryn S. Koch, City Clerk FINALLY adopted, passed and approved this day of , 1992. John S. Bennett, Mayor ATTEST: Kathryn S. Koch, City Clerk jclll6.1 MEMO~ND~ TO: Mayor and Council FROM: Cindy Wilson, Assistant City Manager DATE: November 18, 1992 RE: Ordinance No~, 1992 Amending Housing /Day Care Fund Ordinance SUMMARY: The attached ordinance allocates the city's .45% Housing/Daycare Sales tax into distinct funds for affordable housing and child care. Council should give staff direction regarding the percentage of revenues to be allocated to affordable housing and child care. BACKGROUND: Council previously discussed creating a separate fund as a "trust" fund for child care projects. The Child Care Advisory Committee recommended establishment of some type of a trust fund in order to be able to provide funds for child care after the sales tax ends in mid-2000. The recommendation was to establish a restricted fund, allocate a substantial amount of money to the fund either in a lump sum or over a period of time, restrict the use of the principal solely for investment and restrict the use of interest or other income earned by the fund for child care projects. Council discussed two alternatives for establishing a trust fund. One alternative was to establish a legal trust which could !be totally independent from the City, depending on who is appointed as trustees. The other alternative was establishment of a "pour over" fund. The pour over fund would be established by setting a percentage of the housing/daycare tax revenues for transfer from the housing/day care fund into the pour over day care fund. Council directed staff to pursue development of the pour over fund. CURRENT ISSUES: The attached ordinance is staff's draft which segregates the Housing/Day Care sales tax into two separate funds for affordable housing and day care. Council should determine the percentage of the sales tax revenues to be allocated to each fund. The draft ordinance allows Child Care Fund monies to be invested more broadly than other City funds are currently invested. According to the ordinance, Child Care monies may also be invested in first and second mortgages for construction or purchase affordable housing within the City "by full-time residents regardless as to whether such loan is otherwise secured or guaranteed by the Federal Home Loan Mortgage corporation, Federal National Mortgage Association or other federal or state home mortgage lending agency". The ordinance establishes a "Child Care Fund Investment Committee" to assist the Finance Director lin selecting investments for Child Care Fund monies. This Committee is charged with reviewing and approving all applications for affordable housing loans to be made from the Child Care Fund. It is also charged with recommending loan policies and standards governing affordable housing loans which would be ratified by City Council. The Child Care Committee discussed the option of allowing the fund to make loans to child care providers for capital improvements. This ordinance allows use of the funds for loans to child care providers.' The attached draft of the ordinance restricts the use of Child Care Fund monies to create and/or fund public or private child care services. The Child Care Advisory Committee originally recommended that the revenue from the sales tax be restricted for investment only and that the interest earned on the investment be used for child care services. Council should consider this option and direct staff to amend the ordinance to include this restriction, if desired. RECOMMENDATIONS: Council needs to determine the percentage of the monies to be allocated to affordable housing and to child care. ALTERNATIVES: Council should also determine: e if the ordinance should restrict all or part of the Child Care Fund sales tax for investment only (not restricted in attached draft of the ordinance); * if the ordinance should allow investment of child Care Fund monies for loans to child care providers (alloWed in attached draft of ordinance) PROPOSED MOTION: "I move to approve Ordinance No.__, (series iof 1992) on first reading as amended to allocate % of the sales for affordable housing and % for child care and also to amend ...i."