Suzy Ageton George Karakehian KC Becker Tim ... - City of Boulder

dedicated to specific purposes. There is a similar provision for the sale and use tax in section 3-
2-39, “Earmarked Revenues,” B.R.C. 1981. Such an amendment could read as follows:
3-13-9 Dedicated Revenues.
(a) General Fund Revenue. The amount of the occupation tax revenue
attributable to the ballot measure passed by the voters in 2010 (Ord.
No. 7751) and extended in time by the voters in 2011 (Ord. No, 7804)
shall be used for general revenue needs of the city.
(b) Revenue for Electric Utility Exploration and Planning for Creation.
The amount of the increase in the occupation tax revenue attributable
to the ballot measure passed by the voters in 2011 shall be used for
the purpose of funding the costs of further exploration of and
planning for both the creation of a municipal electric utility and
acquiring an existing electric distribution system.
The council may adopt this amendment at second reading if it is done as an emergency measure.
The council may also conduct another reading on this item as well. At the time this memo was
published, there was no meeting scheduled for December 20, 2011. Assuming that there are no
additional meetings in December, a third reading will delay implementation of the tax until after
the first of the new year. Therefore, if council chooses to add this amendment, staff recommends
that it complete final adoption on December 6 and adopt as an emergency measure as proposed.
ANALYSIS
This proposed ordinance implements the increase and extension of the Utility Occupation Tax
passed by voters on Nov. 1, 2011. The tax is imposed on any utility delivering gas or electricity
in the city, unless the utility is paying a fee under a franchise, license or permit issued by the city.
The ordinance increases the tax by $1.9 million dollars to a total of $6 million dollars per year
and extends the tax from its original expiration of Dec. 31, 2015 to the earlier of (1) Dec. 31,
2017, (2) when the city decides not to create a municipal utility, or (3) when it commences
delivery of municipal electric utility services. The additional revenue will be used to start the
next efforts in the city’s municipalization exploration. The revenue associated with the original
tax is to be used for general fund purposes.
The Utility Occupation Tax is a tax on the utility’s revenues collected from the sale of natural
gas and electricity, which is then passed on to the customer through tariffs that have been
authorized by the Colorado Public Utilities Commission (PUC). The occupation tax electric
surcharge is calculated according to a formula included in Xcel Energy’s electric tariff (See,
Colo. PUC No. 7 Electric, Sheet No. 101 – 101B). Xcel Energy’s gas and electric tariffs each
include a provision by which Xcel Energy is permitted to pass the tax through to the customer.
The council placed the original Utility Occupation Tax measure on the ballot last year to replace
lost revenues associated with the franchise fee payments that the city gave up when it did not
renew the franchise with Xcel Energy. The tax was approved by voters on Nov. 2, 2010.
Agenda Item 5A Page 4