City Sales Tax for Education►r
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Memorandum IMADiS
To: Salina City Commission
U.S.D. #305 Board of Education
From: Dennis Kissinger, City Manager
Gary Norris, Superintendent of Schools
Date: January 7, 1999
Re: City Sales Tax For Education Technology
The following is an outline of issues to be presented and discussed at the planned
joint study meeting of the School Board and City Commission, scheduled for Tuesday,
January 12, 5:00 p.m. at the U.S.D. #305 offices:
In November 1998, voters approved a'/40 city sales tax with a beginning date of
January 1, 1999, and an ending date of June 30, 2004 (5%2 years). By the petition,
ballot and required city ordinance, the proceeds from that sales tax are to "purchase
instructional technology and career/technical education equipment, services, and
training for U.S.D. #305."
City and U.S.D. #305 administrators have met regarding policy and administrative
matters related to implementation and monitoring of the education technology sales tax
program over the coming years. Certain of those issues require further direction and/or
action by the governing bodies.
Issue #t: What is the city/school district legal arrangement most suitable for this
program?
The proceeds of a city sales tax are city funds which must be included in and expended
through the city budget. Since the City of Salina can legally provide grants to other
entities, and U.S.D. #305 can accept grants, staff recommends this be structured as a
grant, with the City as Grantor and U.S.D. #305 as Grantee. The grant/contract terms
can be established by an interlocal agreement between the two entities.
�`--� Staff, recommends the City Attorney and Board Attorney prepare an interlocal
agreement for consideration the last week in January 1999.
ISSSUE #2: What are current revenue estimates and timetables, and what
distribution method should be used?
A. Revenue Projections - The City's latest projections show total proceeds
during the 5'/i year sales tax period at $12,005,000. (See Attachment A.)
1999 receipts are estimates at $1,401,000. Projections are made using
approximately 3% annual growth rate, and are conservative. Monthly checks
will vary from $85,000 to $210,000.
B. Timetables - Merchants began collecting the additional '/40 sales tax on
January 1. The City receives sales tax distributions from the Kansas
Department of Revenue at the end of each month. The first state distribution
which includes the new sales tax will be approximately March 31, 1999 with
the proceeds available for grant transfer to U.S.D. #305 in early April 1999.
C. Distribution Formula - The City's Finance Director has developed a special
allocation formula which will be used for the first 3-4 months (April -July) in
1999, and the last 3-4 months after the sales tax ends in 2004. This is
necessary to account for delinquencies, quarterly filers, and other factors
impacting the start-up/close-out period. In all other months, the distribution
formula of the total %0 city sales tax will be two-thirds ('/Z¢) to City; one-third
(%0) to the U.S.D. #305 grant. The City should make its monthly distribution
to U.S.D. #305 no later than the 5th of each month.
`-' ISSUE #3: How should oversight of the grant be structured?
Staff recommends formal establishment of an Oversights to monitor the use of the
sales tax/grant proceeds, to assure consistency with the purpose. Staff recommends a
group of 5-9 individuals, including one City Commissioner, and one City staff member,
with one School Board Member. The remaining Oversight Group members would be
citizens appointed by the School Board. Staff recommends the Oversight Group meet
quarterly. Their role would be to review the District's plans for sales tax use, as well as
any required reports.
ISSUE #4: What formal plans should be required for use of technology sales tax
funds?
Staff recommends the district prepare short-term (I yr.) And long-term (5 yr.Ip ans for
use of the sales tax/grant proceeds. Thoseplans would be presented to the Oversight
Group.
ISSUE #5: What formal grant reporting should be required?
Staff recommends quarterly reports be made to the Oversight Group. An annual report
should be provided to the City Commission in January of each year, including financial
reports, accomplishment reports and reports noting consistency with the adopted plans.
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At the meeting on January 12, staff will go over this outline, answer questions,
identify decision areas for the govern ing_bodies, and be prepared to begin work
with the respective attorneys on an interlocal agreement.
Attachments
Attachment A
January 7, 1999
EDUCATION TECHNOLOGY SALES TAX;
ESTIMATED ANNUAL REVENUE
1999
Revenues =
$
1,401,000
2000
Revenues =
$
2,081,000
2001
Revenues =
$
2,143,000
2002
Revenues =
$
2,207,000
2003
Revenues =
$
2,273,000
2004
Revenues =
$
1,900000
TOTAL
$12,005,000
Attachment B
(Published in The Salina Journal November __, 1998)
ORDINANCE NUMBER 98-9901
AN ORDINANCE LEVYING A QUARTER PERCENT (1/4%) RETAILERS' SALES
TAX BEGINNING JANUARY 1, 1999, AND ENDING JUNE 30, 2004, WITH THE
PROCEEDS TO PURCHASE INSTRUCTIONAL TECHNOLOGY AND
CAREER/TECHNICAL EDUCATION EQUIPMENT, SERVICES AND TRAINING FOR
U.S.D.#305.
WHEREAS, on August 26, 1998, the governing body adopted Ordinance Number 98-9887
submitting to the electors of the City the question of imposing an additional quarter percent (1/4%)
retailers' sales tax, beginning January 1, 1999, and ending June 30, 2004, with the proceeds to purchase
instructional technology and eareer/teebmeal education equipment, services and training for U.S.D.
#305 (the "Question'); and
WHEREAS, at the county general election on November 3, 1998, the voters of the City voted
in favor of the Question; and
WHEREAS, K.S.A. 12-187(f) (1998 Kan. Sess. Laws, ch. 188) provides, in part, that if a
majority of the electors voting thereon at such election shall approve the levying of such tax, the
governing body of any such city shall provide by ordinance for the levy. of the tax.
BE IT ORDAINED by the Goveming Body of the City of Salina, Kansas:
Section I. There is hereby levied pursuant to K.S.A. 12-187 a quarter percent (1/404) retailers'
sales tax (or .2501. as the same amount is referred to in the Statute) beginning January 1, 1999, and
ending June 30, 2004, with the proceeds to purchase instructional technology and ca vmUcbnical
education equipment, services and training for U.S.D. #305.
Section 2 The City Clerk is authorized and directed to forward a certified copy of this
ordinance to the Kansas Director of Taxation, who shall cause the retailers' sales tax levied hamunder
to be collected in accordance with Kansas law.
Section 3. This ordinance shall be in full force and effect from and after its adoption and
publication once in the official city newspaper.
{SEAL)
ATTEST:
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CMC, City Clerk
Introduced: November 9, 1998
Passed: November 16, 1998
l
Peter F. Brungardt, Mayor