AGENDA ITEM #1.

CITY COUNCIL COMMUNICATION FORM

FROM: Kim Weber, Finance Director

THROUGH: Gary Suiter, City Manager

DATE: January 16, 2018

ITEM: Fiscal Sustainability – Sales & Property Tax Review.

___ DIRECTION _X_ INFORMATION ONLY ___ ORDINANCE ___ MOTION ___ RESOLUTION

I. REQUEST/ISSUE & BACKGROUND INFORMATION:

This agenda item is an educational overview of the taxes in Routt County and the Steamboat Springs community. All of the property tax information for Routt County included is from the 2016 Abstract of Assessment and Summary of Tax Levies published by the Routt County Assessor’s Office (Attachment 2). It is acknowledged that 2017 was a reassessment year, the assessment rate for residential changed from 7.96% to 7.2%, there were additional mill levies approved in the 2017 election, and some taxing jurisdictions change their levies annually. Even with all of these changes, overall the percentages stay substantially the same.

II. ALTERNATIVES:

There are no alternatives listed at this point because this is an educational discussion.

III. STAFF RECOMMENDATION:

Information only.

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IV. FISCAL IMPACTS:

Information only.

V. LEGAL ISSUES:

With any tax questions there are federal, state, and local legal issues that will need to be discussed in detail.

VI. CONFLICTS OR ENVIRONMENTAL ISSUES:

None noted.

VII. CONSISTENCY WITH COUNCIL GOALS AND POLICIES

Fiscal Sustainability

ATTACHMENTS:

Attachment 1: Property and Sales Tax presentation. Attachment 2: 2016 Abstract of Assessment and Summary of Tax Levies.

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Fiscal Sustainability – Sales & Property TaxJanuary 16, 2018

Kim Weber, Finance Director

Attachment #1

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Tax 101

• Sales Tax• Lodging/Accommodations Tax• Use Tax• Excise Tax• Property Tax

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Sales Tax

Taxing Entity Common Name Rate Sunset/ExpireCity of Steamboat Springs City Sales Tax 4% NoneCity of Steamboat Springs School Tax .5% 12/31/2019State of Colorado State Sales Tax 2.9% NoneRoutt County County Sales Tax 1% NoneState of Colorado Marijuana Tax 15% None

Sales Tax defined. The Steamboat Springs Sales Tax is levied on all Sales, leases and rentals at Retail on the basis of, the Purchase or Sales Price on Purchases of Tangible Personal Property and specific services Taxable hereunder. All Sales and Purchases of Tangible Personal Property are subject to the Tax, except as specifically exempted. Sales and Purchases of services as specifically set forth in section 22-182 are subject to the Tax. The Tax is in reality imposed on the Purchaser. The duty is imposed on the seller to collect and remit the Tax to the City under the penalties for failure to do so as prescribed herein. (Chapter 22 – Taxation, Steamboat Springs Revised Municipal Code)

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Lodging/Accommodations Tax

Taxing Entity Common Name Rate Sunset/ExpireCity of Steamboat Springs Accommodations Tax (2A Funds) 1% None - (2A 12/31/2023)SS Local Marketing District LMD Tax 2% 12/31/2019

Accommodations means the transaction of furnishing rooms or Accommodations by any Person, partnership, association, corporation, estate, receiver, trustee assignee, lessee, or Person acting in a representative capacity or any other combination of individuals by whatever name known to a Person who for a consideration Uses, possesses, or has the right to Use or possess any room in a hotel, motel, home, condominium, campsite, inn bed and breakfast, residence or similar establishment, under anyconcession, permit, right of access, license to Use, or other agreement, or otherwise. (Chapter 22 – Taxation, Steamboat Springs Revised Municipal Code)

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Local Marketing District• Steamboat Springs Local Marketing

District

• A Colorado local governmental district

• 2% Lodging (accommodations) taxwithin boundaries

• LMD Boundaries in red

• Agreement between LMD and SkiCorp dictates how funds are spent(approved by City Council)

• Agreement expires June 2020

• Previous LMD Air Service Tax was aCITY SALES TAX that the Citycommitted to air service (expired)

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Use Tax

Taxing Entity Common Name Rate Sunset/ExpireCity of Steamboat Springs City Building Use Tax 4% NoneCity of Steamboat Springs School Building Use Tax .5% 12/31/2019City of Steamboat Springs City Vehicle Use Tax 4% NoneCity of Steamboat Springs School Vehicle Use Tax .5% 12/31/2019State of Colorado State Building Use Tax 2.9% NoneState of Colorado General Use Tax 2.9% NoneRoutt County County Building Use Tax 1% None

Use Tax defined. Means the Tax paid or required to be paid by a Consumer for Using, Storing, Distributing or otherwise Consuming Tangible Personal Property or Taxable Services inside the City. The Steamboat Springs Use Tax is levied upon the privilege of Using, Storing, Distributing or otherwise Consuming Taxable Tangible Personal Property and Taxable Services (as described in section 22-197) in the City of Steamboat Springs which property or services is Purchased, leased or rented at Retail and not subjected to the Steamboat Springs Sales Tax, without regard to whether the property or service is Purchased either from sources within or without the City. Nonresident Persons Engaged in Business in Steamboat Springs as defined, are required to collect and remit the Use Tax on Taxable transactions. (Chapter 22 – Taxation, Steamboat Springs Revised Municipal Code)

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Excise Tax

Taxing Entity Common Name Rate Sunset/ExpireCity of Steamboat Springs City Building Excise Tax 1.2% of “New Construction” NoneState of Colorado Marijuana Excise Tax 15% of calculated rate NoneState of Colorado Cigarette Excise Tax 4.2 cents per cigarette NoneFederal & State Multiple fuel taxes,

alcohol, fees, etc.varies

Excise taxes are taxes paid when purchases are made on a specific good, or a specific activity occurs.

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Differences between State & City Tax Code

• “Food for home consumption” is exempted from State sale tax (taxableaccording to City Code)

• Most utilities are exempt from State sales tax (taxable according to CityCode)

• State has a General Use Tax and City does not• State has an additional tax on Marijuana, City does not

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Sales Tax Collected - $300 Retail Merchandise Sale in Steamboat Springs (8.4%)

$8.70

$3.00

$12.00

$1.50

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

Sal

es T

ax C

olle

cted City/Education Fund Board .5%

City/General Fund 4%Routt County 1%State of Colorado 2.9%

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Sales Tax Collected - $300 Room Night in LMD (11.4%)

$8.70

$3.00

$12.00

$3.00

$6.00

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

Sal

es T

ax C

olle

cted

LMD/Air Service 2%City Accom/2A Trails etc. 1%City/Education Fund Board .5%City/General Fund 4%Routt County 1%State of Colorado 2.9%

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City Sales Tax by SourceLodging & Amenities

18%

Utilities8%

Restaurants17%

Liquor Stores4%Estimated Groceries

8%

Misc. Retail37%

Marijuana2%

Sporting Goods6%

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Property Tax

• Levy on property that the owner is required to pay. Can be onpersonal property or real property

• The 2016 Abstract of Assessment and Summary of Tax Leviespublished by the Routt County Assessor’s Office was used forall property tax information in this presentation

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Gallagher Amendment• Intent was to keep a state-wide property tax payment ratio of

residential to non-residential at 45/55:• 45% - Residential• 55% - Non-Residential (Commercial, Industrial, Oil & Gas)

• To achieve this, there are state-wide assessment rates of:• 7.2% - Residential• 29% - Non-Residential

For Example:You have a business and a house both worth $500,000 (actual value) in the same taxing jurisdiction where the mill levy is 45 mills – Here is how the property tax will be calculated:House - $500,000 x 7.2% = $36,000 (assessed value) x .045 = $1,620 in property taxBusiness - $500,000 x 29% = $145,000 (assessed value) x .045 = $6,525 in property tax

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2016 Assessed Valuation by Type

Agricultural, $51,961,180 , 5%

Commercial, $202,283,790 ,

19%

Mobile Homes, $1,362,910 , 0%

Natural Resources,

$35,764,890 , 3%

Residential, $541,582,020 ,

50%

Industrial, $5,438,360 , 1%

State Assessed, $115,370,600 , 11%

Vacant, $98,610,580 , 9%

Personal Property, $25,123,080 , 2%

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2016 PropertyTax Revenue

Routt County Government, $18,207,706 ,

32%

Libraries, $3,414,091 , 6%

Special Districts, $8,700,883 , 16%

Schools, $22,095,484 ,

39%

College, $3,327,861 ,

6%

Towns, $621,831 , 1%

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2016 Property Tax – Routt County Broken Out

Routt County General Fund, $12,566,188

Road & Bridge, $813,631

Public Welfare, $547,257

Communications, $1,378,508

Purch Dev Rights/Open Space,

$1,554,708

Museums, $310,942

Horizons, $1,036,472

Libraries, $3,414,091 Special Districts, $8,700,883

Schools, $22,095,484

Colorado Mountan College, $3,327,861

Towns, $621,831

Routt County,

$18,207,706

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2016 Property Tax –Special Districts

Property Tax for Special Districts = $6.8M

Boundaries & Assessed Valuation varies

Alpine Mtn Ranch Metro Dist

Catamount Metropolitan

Colorado River Water Consrv

Craig Rural FireHayden Cemetery

Morrison Creek W&S

North Routt Fire

Oak Creek Cemetery

Oak Creek Fire

Solandt Memorial Hospital

South Routt Cemetery

South Routt Medial Center

Steamboat Cemetery

Steamboat Lake W&S

Steamboat Springs Area Fire

Steamboat II Metro Dist.

Timbers W&S-Full Service

Timbers W&S-Preserv Subdv

Tree Haus Metro Dist.

Upper Yampa Water Conserv

West Routt Fire

Yampa Fire

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How SSRA Revenue is Derived (2016)Taxing Entity Assessed Valuation

TIF Assessed Value Net Levy Gross Net

Gross less Net (SSRA

Revenue)General Fund $1,077,497,410 ($41,025,268) 0.01212 $13,063,579 $12,566,188 $497,390 Road & Bridge $1,077,497,410 ($41,025,268) 0.00079 $845,835 $813,631 $32,205 Public Welfare $1,077,497,410 ($41,025,268) 0.00053 $568,919 $547,257 $21,661 Communications $1,077,497,410 ($41,025,268) 0.00133 $1,433,072 $1,378,508 $54,564 Purch Dev Rights/Open Space $1,077,497,410 ($41,025,268) 0.0015 $1,616,246 $1,554,708 $61,538 Museums $1,077,497,410 ($41,025,268) 0.0003 $323,249 $310,942 $12,308 Horizons $1,077,497,410 ($41,025,268) 0.001 $1,077,497 $1,036,472 $41,025 TOTAL ROUTT COUNTY 0.01757 $18,928,397 $18,207,706 $720,691

East Routt Library Dist. $865,137,200 ($41,025,268) 0.00372 $3,214,850 $3,062,400 $152,450 Colorado River Water Consrv $1,077,497,410 ($41,025,268) 0.00025 $272,607 $262,227 $10,379 Steamboat Cemetery $865,137,200 ($41,025,268) 9.5E-05 $82,188 $78,291 $3,897 Upper Yampa Water Conserv $1,070,096,980 ($41,025,268) 0.00182 $1,947,577 $1,872,911 $74,666 RE-2 (Steamboat) $865,137,200 ($41,025,268) 0.01803 $15,598,424 $14,858,738 $739,686 Colorado Mountain College $873,614,890 ($41,025,268) 0.004 $3,491,839 $3,327,861 $163,978 City of Steamboat Springs $645,973,640 ($41,025,268) 0 $0 $0 $0

GRAND TOTAL 0.04548 $43,535,881 $41,670,134 $1,865,747

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2016 Routt County Assessed Valuation by Town/City

Steamboat Springs,

$645,973,640 , 60%

Hayden, $19,254,710 , 2%

Oak Creek, $6,828,690 , 1%

Yampa, $3,457,740 , 0%

Unincorporated , $401,982,630 ,

37%

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2016 Property Tax – Towns/Cities Broken Out

Routt County Government, $18,207,706

Libraries, $3,414,091

Special Districts,

$8,700,883

Schools, $22,095,484

Colorado Mountan College, $3,327,861

Hayden, $482,658

Oak Creek, $76,249

Steamboat Springs, $0

Yampa, $62,924

Towns , $621,831

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Questions & Next Steps

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actual

actual

actual

Attachment #2

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Commercial

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