The City of Cottonwood will hold a primary/special election March 13.
This election, in addition to the filling of three city council seats, will have three measures on the ballot that will have broad impacts on the short- and long-term operation of the City of Cottonwood.
The purpose of this commentary is to provide a brief introduction to these important measures on the ballot, and encourage the residents of Cottonwood to become informed on the measures and exercise your right to vote March 13.
Proposition 200 – A proposal to prohibit the levying of a sales tax upon foodstuffs
The City of Cottonwood currently imposes a 2.2-percent sales tax on all retail activities within the city. This sales tax includes the sale of foodstuffs. Proposition 200 proposes to prohibit levying this sales tax upon foodstuffs purchased within the City of Cottonwood. The citizen initiative process placed this proposition on the ballot.
A "Yes" vote on Proposition 200 shall have the effect of repealing the sales tax upon foodstuffs purchased within the incorporated boundaries of the City of Cottonwood.
A "No" vote on Proposition 200 shall have the effect of maintaining the sales tax upon foodstuffs within the incorporated boundaries of the City of Cottonwood.
The Cottonwood City Council asked city staff to estimate the revenue generated by the sales tax upon foodstuffs, evaluate the impacts to the city budget, and present budget options if Proposition 200 is approved.
The council asked for this information as part of the regular budget preparation process of the city. City staff has estimated that the current revenue generated by the sales tax upon foodstuffs to be about $615,000 in the coming fiscal year (beginning July 1, 2001). To determine the actual budget impact of any revenue loss for the coming fiscal year, consideration is given to projections for other revenue sources and projections of committed expenditures. After consideration of these projections the adjusted net revenue loss to the city is about $556,000, based upon, and after, a freeze of all personnel costs, no new or replacement equipment, and no new capital projects.
The City Council is considering several options and approaches to manage the budget impact if Proposition 200 is approved, although, no decisions have been made at this time. City staff presents an annual draft budget to the City Council in early May of each year. This draft budget will account for revenue and expenditure projections based upon the result of the March 13 election.
Throughout May, the council holds budget work sessions, open to the public, with the city staff to review and make changes to the draft budget. In June, the council typically adopts a tentative budget, and in August the final budget is adopted.
Proposition 300 – a resolution submitted by the city council of the city of cottonwood proposing an extension of the alternative expenditure limitation.
The City of Cottonwood currently operates under the alternative expenditure limitation, often referred to as the home rule option. Cottonwood voters have approved operating under the alternative expenditure limitation since 1981.
The alternative expenditure limitation is not a new tax. It simply provides, with voter authorization, that the Cottonwood City Council be able to exercise local control in establishing an annual expenditure limitation based upon available revenues. The State of Arizona requires that the voters approve this authorization every four years. If the voters do not approve the alternative expenditure limitation, local expenditures will be set by the state, and be based upon a formula adopted by the state in 1979.
A "Yes" vote on Proposition 300 shall have the effect of extending the alternative expenditure limitation for the City of Cottonwood for another four years.
A "No" vote on Proposition 300 shall have the effect of not allowing the City of Cottonwood to extend the alternative expenditure limitation and will require the city to be limited to the state-imposed expenditure formula.
City staff has estimated that current revenues available for fiscal year 2001-2002, subject to the alternative expenditure limitation, to be $21.3 million while the state plan expenditure limit for fiscal year 2001-02 is estimated to be $17.9 million. Approval to extend the alternative expenditure limitation will allow the City Council to set expenditure limitations within the estimated available revenue of $21.3 million, maintaining local control over local revenues.
Ballot question – Shall the city of cottonwood be authorized to engage in the water utility business?
Under Arizona law, local governments must have approval from the electorate to operate a utility business. The City of Cottonwood has that authority for the operation of the wastewater system. The City Council is seeking that authority for the water utility business. The City of Cottonwood has been evaluating many issues involving the local water supply, and is developing a water management strategy to assure adequate water supply into the future. One component of a water management strategy includes consideration of operating a municipal water company.
The City Council is asking approval to be in the water utility business in the event that it becomes in the best interest of the residents of the City of Cottonwood to provide municipal water service.
A "Yes" vote on this question grants the authorization to engage in the water utility business.
A "No" vote on this question prohibits the city from being in the water utility business.
This question does not involve the consideration of any new tax, or the issuance of any voter authorized bonds associated with the operation of a water utility business. It simply provides the basic authorization to engage in the water utility business in the event that it is determined to be in the best interest of the city.
Brian Mickelsen is the city manager for Cottonwood.
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