Title
Agenda Item:
Ordinance Amending Real Estate Excise Tax (REET)
Body
Issue:
Allowing the Real Estate Excise Tax Fund to be used for street maintenance as part of the 2013 General Fund budget.
Committee Recommendation:
None.
City Manager's Recommendation:
Move to adopt an ordinance amending Ordinance 6769 on first reading and forward to second reading.
Staff Contact:
Dean Walz, Fiscal Service Director, Administrative Services Department, 360.753.8465
Presenter(s):
None: Consent Calendar item.
Background and Analysis:
In September 2011, the Council approved an ordinance creating a Real Estate Excise Tax (REET) Fund. The ordinance authorized the fund to be used for capital purposes as authorized by law. In general, REET is limited to capital projects. The law was amended to allow a portion of the REET to be used for operations and maintenance (O&M) of existing capital projects from June 30, 2012 until December 31, 2016. The amount which can be used for O&M is the greater of $100,000 or 35% of available funds. The 2013 estimated REET funds are $1,000,000. The maximum amount which could be used for O&M in 2013 is $350,000. The 2013 General Fund budget was developed with the use of $215,367 of REET funds for transportation O&M.
Staff is proposing to amend the REET ordinance to remove the word capital from Section 2 resulting in the following language: "The Fund shall be used for purposes as authorized by law for the use of REET funds as directed by the City Council."
Neighborhood/Community Interests (if known):
None.
Options:
1) Approve the ordinance, which will allow for operation and maintenance of existing capital projects.
2) Do not approve the ordinance. This will result in $215,367 as currently planned for funding of the 2013 General Fund budget not being available. This amount would have to come from some other source, be reduced from the proposed budget or a combination thereof.
Financial Impact:
$215,367 of REET funds to be used for the 2013 General Fund budget as proposed in the preliminary budget. This will result in less funds being available in the Capital Facilities Plan for capital transportation projects.