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2 <br /> County and Cities and Towns receive sales tax revenue. Under option two, in addition to the <br /> County, Cities & Towns, and all special tax districts also receive Sales tax revenues. <br /> The Board of Commissioners has two different methods available to distribute sales tax <br /> revenue and each has distinct advantages and disadvantages to the County. There are no new <br /> revenues created. The two options are different methods to distribute existing sales tax <br /> revenues. <br /> CURRENT SITUTATION: orange county has used the Population Method for the distribution <br /> of sales tax revenues for at least the last 20 years. If the Board wishes to change the method of <br /> distribution, the Board of County commissioners shall adopt by resolution during the month of <br /> April the method of distribution of sales tax revenues that shall be in effect for the next fiscal <br /> year. if the Board fails to adopt a resolution changing the method of distribution, the method of <br /> distribution currently in effect shall continue for the following fiscal year. <br /> FINANCIAL IMPACT: Attachment 3 estimates the property tax rate impact on local <br /> governments of a change from a Population based distribution to the Property Tax Levy <br /> method. If the Board of county commissioners were to adopt the Ad Valorem Property Tax <br /> Levy distribution option for local option sales tax, it would have a negative material impact on all <br /> Cities and Towns. The County and all special taxing districts would benefit from the change at <br /> the expense of the Cities and Towns. <br /> Estimated amounts of revenues gained by the County & Special Taxing Districts: <br /> o orange County $ 981,597 <br /> o Chapel Hill Carrboro City Schools $2,439,525 <br /> o All Fire Districts $ 413,579 <br /> o Chapel Hill Downtown Service District $ 21,579 <br /> Estimated amounts of revenues lost by the Cities & Towns: <br /> o Carrboro $ 999,095 <br /> a Chapel Hill $2$5439115 <br /> o Durham $ 17042 <br /> o Hillsborough $ 235,105 <br /> o Mebane $ 879122 <br /> RECOMMENDATION(S): No change a to the current sales tax distribution methodology is <br /> � <br /> recommended at this time. <br /> The Manager recommends the Board confirm the selection of the 'Population' option for <br /> distributing local option sales taxes within orange county for Fiscal Year 2010 - 2011. <br /> A change to the 'Ad Valorem' option increases sales tax revenues to the County, but does so to <br /> the financial detriment of the Towns. The disparity of revenues-between the two methods is <br /> substantial and continuation of the 'Population' option highlights a positive financial impact to <br /> the Towns. While not highlighted in the past, this is a commitment by the Board of <br /> Commissioners deserving of an acknowledgement. <br />