05/22/1978 Meeting - Laserfiche WebLink

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III. Systems Development Tax: Motion to Reconsider Regarding procedure, Manager explained Council's motion to reconsider, in ~ effect, suspends the action previously taken April 24, 1978. Thus, the ,.., ordinance is suspended and that suspension continues until motion to reconsider has been adopted or defeated. If the motion to reconsider is actually adopted, its effect is to place immediately before Council the question of approval and final passage; that is, the Council is placed in the exact position it occupied the moment before it voted originally. At that juncture, the Council has the perogative of reconsidering approval and final passage, postponing action indefinitely or to a certain time, amending the ordinance, tabling the ordinance, or any of the actions that it normally takes with respect to ordinances it is considering. If the Council fails to take action, the motion to reconsider will expire at the end of the month of June. In the meantime, the ordinance is suspended. If the motion is defeated, the underlying ordinance remains in effect. If the motion to reconsider is not adopted, staff would suggest con- sidering amending the ordinance through other proposals. Manager said the motion to reconsider was brought about by concerns of JHC and Councilor Obie who felt information being supplied by the banks and savings and loan institutions seemed to indicate that they would not allow the time payment provision to occur when making loans. It would have the effect of possibly raising the market value of homes, as well as other property in the housing market generally. If the motion to recon- sider is passed, one of the reasons staff is opposed to approaching the amendment process at this time is that the April 11 effective date would be ineffective. It would take one to one and one-half months, at a minimum, to complete passage of the ordinance and another effective date 4IIk would have to be considered. Thus, the ballooning effect of applications being submitted, such as happened with the panhandle lots when moratorium was declared. Manager then gave some arguments from staff's point of view against the passage of the motion to reconsider. He felt by passage of the ordinance and implementation for a six-month period of time, it would be easier for Council to consider how the ordinance needed to be amended through experience of it being in effect. He noted the concerns about the affect on the market value. He noted the one-percent impact on property sales price was probably a high estimate. Land values are going up and the systems development tax would not relate to land cost, but building permit values. Thus, in face of inflation, the charge becomes less than had been estimated. Also, it was felt that most buyers would elect to use a mortgage payment because that is the easiest route. The delay in implementation of the ordinance also raises questions as to whether or not the concurrent ordinance regarding street assessments should be recon- sidered. He noted budgeting for 1978-79 had been done based on these assessments being collected. Also, the machinery for collection has been established by the City. It was felt the tax to be the most equitable approach to take care of the growth needs of the city. Information from various banks and savings and loan institutions indicate a mixed response to the proposed tax. e 5/22/78--12 31~ ~ J