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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 and towns, and ail 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 SITUTATICN~ 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 must adopt by resolution during the month of <br />April the method of distribution of sales tax revenues to be in effect for the next fiscal year. If the <br />Board fails to adopt a resolution changing the method of distribution, the method of distribution <br />currently in effect continues 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 $ 874,082 <br />o Chapel Hill Garrboro City Schools $2,164,116 <br />o All Fire Districts $ 392,286 <br />o Chapel Hill Downtown Service District $ 18,542 <br />Estimated amounts of revenues lost by the Cities & Towns: <br />o Garrboro $ 939,743 <br />o Chapel Hill $2,224,773 <br />o Durham $ 648 <br />o Hillsborough $ 209,268 <br />o Mebane $ 74,627 <br />State law currently provides only two options for the County to select. Same counties have <br />successfully sought additional options that allow a balance between the two existing options. <br />There are also counties that have agreements Memoranda of Understandings with their local <br />municipalities that provide for a compromise position between the two existing options. <br />If the County changed from the `Population' to the `Ad Valorem' option, the County would gain <br />$874,482 and the towns would decrease by $3,449,419. <br />