Agenda Package - 08-13-07 (Finance)

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COUNTY MANAGER'S REPORT - AUGUST 13, 2007 - Finance Committee 1) There has been a lot of discussion recently about the '/4 cent local option sales tax and .04 percent land transfer tax that was recently passed by the General Assembly. Ballots for the upcoming November election have to be printed by the end of the August. Since we are only meeting once in August, a special meeting would need to be called if we are going to move forward with a November referendum. If the citizens approve this referendum during the November election, the new sales tax will go into affect on April 1, 2008. This would give the County three (3) months of unbudgeted sales tax in the 07-08 fiscal year. The .04 percent land transfer tax if approved in November would go into affect January 1, 2008 - an opportunity to collect six (6) months of unbudgeted revenue. I am recommending to the Committee that if we decide to move forward we should consider the sales tax over the land transfer tax for a couple of reasons. First, it is estimated that the '/4 cent sales tax will generate $1.5 million in revenue per year versus $980,000 per year from the .04 percent land transfer tax. In addition, the sales tax will meet less opposition in the public and thus have a better chance of passing. The sales tax would be spread out among all tax payers, not just the ones sellingfbuying real estate. The County could ask that the Board of Elections place both tax options on the ballot. If both passed, the Commissioners then would choose which one to enact. 1 believe that this would be confusing to the voters, and we are better off choosing one over the other. It is important to know that the '/4 cent sales tax and the land transfer tax will not be shared with the municipalities and is unrestricted as to its use. The Commissioners can use the funds in anyway they see fit. The Commissioners could wait until May to hold the referendum. If the referendum passes in May, the sales tax disbursements should start October 1, 2008. One advantage to waiting is the money that the County will save by not having to open all the voting precincts in the County. Since the November election is a municipal election and there is not a County wide issue on the ballot at this time, the Board of Elections would have to open all precincts if we ask them to put this item on the ballot. The additional cost for this is estimated at $12,580.00. This amount would obviously be offset if the referendum passes. If we wait until May for the referendum, the earliest either tax would start is July 1, 2008. 2) Organizational Issues Personnel A) Report on Cooperative Extension - Agriculture Agent B) Discussion on Assistant County Manager Position C) Discussion on General Services Organization D) Other Organizational Issues 3) Review of Financial Policies - Hand out of Policies ~A