HomeMy WebLinkAbout5.811 Original Contract
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Contract 145.06.002
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INTERLOCALAGREEMENT
Clallam County and the City of Port Angeles
Revenue Sharing within the City's Eastern Urban Growth Area
This Agreement, made pursuant to Chapter 39.34 RCW, is between Clallam County
(hereinafter, the County), a political subdivision of the State of Washington, and the City of Port
Angeles, (hereinafter, the City), a municipal corporation of the State of Washington.
WHEREAS, the County and the City have worked together constructively on management
issues within the City's Eastern Urban Growth Area (hereinafter EUGA);
WHEREAS, the County and the City executed an agreement for orderly annexation of the
EUGA in November 2005;
WHEREAS, the County and the City have reached agreement and are constructing a
sanitary sewer extension through the EUGA;
WHEREAS, the additional urban services are anticipated to result in economic
development of the EUGA and increased sales taxes;
WHEREAS, the County and the City desire to continue working together to reach
agreement on other cooperative management issues within the EUGA,
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
contained herein, the parties agree as follows:
1. Revenue Sharing. The City and the County recognize that the EUGA includes a land
base for potential commercial development and that the area produces significant sales
tax revenue. The City and the County agree that additional economic development in the
EUGA can benefit the citizens of the City as well as the citizens of the County. It is in the
best interest of the citizens that the City and the County cooperate to encourage such
economic development. Sharing sales tax revenues will continue the County's ability to
provide services in unincorporated Clallam County, as well as provide sufficient revenue to
the City for the support extension of utility infrastructure to the EUGA. Both parties agree
that the sharing of sales tax revenues, both prior to and after annexation, will serve to
encourage economic development and development of infrastructure.
2. Definitions. For purposes of this agreement:
"Annexation Area{s}" means areas proposed for future phased annexation in the
Interlocal Annexation Agreement.
"Governing Jurisdiction" means: The City as to all areas now or hereafter
encompassed within the corporate boundaries of the City, and the County as to all areas
not encompassed within the corporate boundaries of the City.
"Interlocal Annexation Agreement" means the agreement titled "Interlocal
Cooperation Agreement Establishing a Method for Phased Annexation of the Port Angeles
Eastern Urban Growth Area," signed by the County on November 8, 2005, and signed by
the City on November 1, 2005.
"Sales and Use Tax" means: The retail sales and use tax levied under RCW 82.14.030,
as that section may hereafter be amended or re-codified.
"New Business" means:
a. All businesses and other entities subject to Sales and Use Tax, not located in the
Annexation Area as of June 30, 2006 that commence business, work, or operations
in the Annexation Area after June 30, 2006; or
b. For any businesses or other entities in existence in the annexation area prior to
June 30, 2006, new business means the increase or expansion of business following
the issuance of a building permit or other permit to change use or occupancy for
the purpose of expanding, increasing, remodeling, or similar work. For purposes of
revenue sharing provisions of this agreement, the increase in sales or use tax
generated by such new business shall be any sales or use tax revenue in excess of
the average monthly Sales and Use Tax paid by the business or other entity during
the 12 month period immediately preceding the date it applied for the permit; or
c. All construction occurring in the Annexation Area after the effective date of this
agreement, except construction of (1) single family housing units, (2) residential
housing units consisting of 5 or fewer individual dwelling units, and (3) the currently
planned construction of a sanitary sewer line from the City into the EUGA, to be
constructed in 2007.
3. Revenue Sharing in EUGA Prior to Annexation. Beginning in April 1, 2007, for each
Annexation Area not annexed by the City prior to July 1 of the previous year, the County
shall pay to the City 50 percent of the Sales and Use Tax paid to the county on account of
New Business in the Annexation Area. Such payments shall be made on a quarterly basis
and shall continue until the City annexes the Annexation Area.
4. Revenue Sharing in EUGA After Annexation. For each Annexation Area that is
annexed by the City, the City shall pay, beginning six months following annexation, to the
County, 50 percent of the Sales and Use Tax paid to the city on accpunt of New Business
that is inaugurated in the annexation area after the date of the Annexation. Such
payments shall be made on a quarterly basis and shall continue for the duration of the
agreement, as provided in Section 7 below.
s. Proposed Annexations. The County and City anticipate that each specific proposed
annexation will require negotiation of infrastructure development, transition of services,
financial matters or other issues particular to its time, place, and geography. The City
and County commit to completing these negotiations and executing an interlocal
agreement on such issues in a timely manner. When the City begins budgeting to effect
annexation of an Annexation Area, but in no event less than six months prior to effecting
an annexation, the City shall inform the County of the estimated date of annexation.
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6. Examples. The Exhibit A that is attached to this Agreement contains examples that
demonstrate the application of the definitions and the calculations that are intended
pursuant to sections 1 through 4 above. Exhibit A is incorporated by this reference and is
intended to provide guidance in the implementation and performance of this Agreement.
7. Duration. As to each Annexation Area, this Agreement will remain in effect until (1) the
number of payment periods after the date the area is annexed by the City is equal to the
number of payment periods from April 1, 2007, to the date of annexation, or (2) mutually
modified or terminated by written agreement of both parties, whichever occurs earlier.
8. Filing. When fully executed, this Agreement shall be filed with the Clallam County
Auditor.
9. Notices. Any notices required by this Agreement shall be delivered, or mailed postage
prepaid, and addressed to:
C1allam County
County Administrator
Clallam County
223 East 4th Street, Suite 4
Port Angeles, WA 98362
City of Port Angeles
City Manager
City of Port Angeles
321 East 5th Street
Port Angeles, WA 98362
10. Sales and Use Tax Records. The County shall provide to the City for review and
inspection all records, reports, payment receipts, and all other documents requested by
the City relating to the sales and use taxes levied each month within each Annexation
Area and other information necessary to confirm the calculations required by this
Agreement. The City shall provide to the County for review and inspection all records,
reports, payment receipts, and all other documents requested by the County relating to
the sales and use taxes levied each month within each Annexation Area and other
information necessary to confirm the calculations required by this Agreement. The
purpose of this provision is to allow each party full access to all records and documents
necessary to confirm, verify, and audit the calculations required by this agreement. Each
Party aggress to provide the records, reports, and other documents in such form and
format reasonably requested by the other and designed to allow efficient and timely
verification and auditing of the information necessary
11. Addenda. Both parties have identified other topics related to management of the City's
designated EUGA where the development of management principles may best serve the
parties and their citizens. Both parties intend to continue discussions, and may reach
agreements on other revenue and management topics. Addendums may be added to this
agreement with the same force and effect, and subject to the same terms and conditions
as contained within this Agreement.
12. Waiver. Failure by the County or the City to enforce any term or condition of this
Agreement shall not be construed to constitute a waiver of any other term or condition, or
of any subsequent breach of any provision of this Agreement.
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13. Entire Agreement. This Agreement includes the entire Agreement of the parties with
respect to any matter addressed in this Agreement.
14. Amendment. This Agreement may be amended only upon the written agreement of the
parties made with the same formalities as those required for its original execution.
15. Disputes. Disputes over interpretation of this agreement, which are un-resolvable
between the parties after direct discussions and mediation, shall be referred to the
Clallam County Superior Court.
16. Effective Date. This Agreement shall take effect upon execution by both parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed this
twtn<U[ --- PI ~~1 day of AI ollunbbv' 2006.
BOAR~ CLALLAM COUNlY COMMISSIONERS
Howard V. Doherty, Jr., Chair
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ATTEST:
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Becky J. Up , C, City erk
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William E. Bloor, City Attorney
ATTEST:
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Trish Holden, CMC, Clerk of the Board
APPROVED AS 4:
77LI- 7 ~
Mark Nichols, Deputy Prosecuting Attorney
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Exhibit A
Illustrations to sections 1 through 4
1. New business
a) prior to annexation (business that commences operation after June 31, 2006)
Quarterly sales tax collected from the new business (as per Department of Revenue report)
Quarterly, County submits to the City 50% of collected sales and use tax (payments to City beginning April 1, 2007)
b) after annexation (for new business inaugurated after the date of annexation)
Quarterly sales tax collected from the new business (as per Department of Revenue report)
Quarterly, City submits to the County 50% collected sales and use tax
2. Expansion of business
Example of calculation:
Sales & use tax collected in 12 month period immediately preceding date subject bUSiness applied for the permit
Recalculated per quarter ($80,000/4)
Quarterly sales tax generated after the permit
Increase in sales tax due to expansion:
a) Before annexation: Quarterly, County submits to the City 50% of increase in sales and use tax
b) After annexation (for expansion of existing business after date of annexation);
Quarterly, City submits to the County 50% of increase sales and use tax
Example
Only
$50,000
$25,000
$60,000
$30,000
$80,000
$20,000
$28,000
$8,000
$4,000
3. Construction (except single family housing, residential of 5 or fewer units, and currently planned sanitary sewer line)
Example of calculation:
Construction cost: $1,000,000
Sales tax from construction (1%)
a) Before annexation: Quarterly, County submits to the City 50% sales and use tax from construction
b) After annexation: Quarterly, City submits to the County 50% sales and use tax from construction
$10,000
$5,000