Item:
Title
Approval of Interlocal Cooperation Agreement for the Division of Sales Tax Between the County of Durham and the City of Durham July 1, 2024 to June 30, 2025
Body
Date of BOCC Meeting: March 11, 2024
Request for Board Action:
Agenda Text
The Board is requested to approve a one-year interlocal cooperation agreement for the division of sales tax between the County of Durham and the City of Durham for the period July 1, 2024 through June 30, 2025. This interlocal pertains to Sales Tax Articles 39, 40, & 42 and 44 (including Local Government Hold Harmless Provisions). City administration has agreed to extending the current interlocal agreement per established guidelines for an additional year.
The updated agreement, renewed annually, splits all collected sales tax for both the City and County, with the County receiving 55.5% of the total amount and the City 44.5%. Per state statute the County Commissioners have the authority to set the distribution method for Sales Tax Articles. This agreement continues the use of the Per Capita Distribution method which is best for both local governments due to the nuances of the Ad Valorem method.
The agreed upon split the past three fiscal years was 56% and 44% for the County and City respectively. With the changing demographics and tax levies of the County (and city), this slightly reduced split is a more realistic projection of an ILA that is equally advantageous to both the City and County; as opposed to the County declaring Ad Valorem as the distribution method. This is a projected net $1 million dollar reduction in total sales tax revenue for the County.
The Durham City Council is set to approve this annual interlocal cooperation agreement at an upcoming City Council meeting for the next fiscal year (FY 2024-25).
Alignment with Strategic Plan: Goal 5: Accountable, Efficient, and Visionary Government
Resource Persons: S. Keith Lane, Director of Budget and Management Services, D...
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