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HomeMy WebLinkAbout5.811 Original Contract 5.811 @b Contract 145.06.002 , dz..dojP 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. J:\public\D30 UGA Management\PA EUGA\Final Documents\Revenue Sharing.doc Page 2 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. J:\pubhc\D30 UGA Management\PA EUGA\Frnal Documents\Revenue Sharing.doc Page 3 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 . I ATTEST: & t!~~ J.}2JJ"- Becky J. Up , C, City erk *~T;:~ William E. Bloor, City Attorney ATTEST: ~~"50- r-f-o {~ Trish Holden, CMC, Clerk of the Board APPROVED AS 4: 77LI- 7 ~ Mark Nichols, Deputy Prosecuting Attorney J:\public\D30 UGA Management\PA EUGA\Flnal Documents\Revenue Shanng.doc Page 4 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