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City Council Meeting Minutes

December 27, 2007

City Council convened in Special Session at 1:00 p.m. on Thursday, December 27, 2007, in Council Chambers, 1 Marketway West, 3rd Floor, York, PA, with the following members present: Toni Smith, Wm. Lee Smallwood, Joseph R. Musso, Vice President, and Cameron Texter, President, with President Texter presiding. Vickie Washington was not present due to a personal emergency. Mayor John Brenner was not present.

The following members of the Administration were absent: Jim Gross, Director of Public Works, Kim Bracey, Director of Community Development, Matt Jackson, Director of Economic Development, Mark Whitman, Police Commissioner, John Senft, Fire Chief, and Michael O’Rourke, Business Administrator. Assistant Solicitor Shaleeta Washington was present.

Members of York City Council staff in attendance included: Dianna L. Thompson, City Clerk.

Final Passage of Bill No. 49, Session 2007, A Bill amending Article 345 "Occupation Privilege Tax" of the Codified Ordinances to comply with the Act of June 21, 2007, P.L. 13, No. 7, to change the name of the Emergency Municipal Services Tax to the Local Services Tax. This Bill will also amend the following: Increase the income exemption criteria for those earning less than $2,000 per year to those earning less than $12,000 per year; Establish claim exemption procedures; Amend the duty of employers; Change the dates for determining liability; Remove language pertaining to "Refunds" and "Refunds in Excess of Annual Limit"; and establishes criteria for tax relief through implementation of homestead and farmstead exclusion. The revenue expected to be received from this tax is estimated at $1.3 million. (Click to view Bill). The Bill was introduced by Texter at the December 4, 2007 meeting of Council and read by short title. On motion of Texter, seconded by Smith, Bill No. 49 came up for discussion.

President Texter explained that Council has convened in special session to consider passage of Bill No. 49, which by law was required to be advertised for three consecutive weeks in the newspaper. As advertising of Bill No. 49 ended the week of December 17, Council had to convene prior to December 31 to consider passage. He then explained the intent of Bill No. 49 and stated that this does not create a new tax.

There being no further discussion, Bill No. 49, Ordinance No. 48, passed by the following vote: Yeas – Musso, Smith, Smallwood, Texter – 4; Nays – 0.

Final Passage of Bill No. 50, Session 2007, A Bill re-establishing Article 353 "Occupation Tax" of the Codified Ordinances for general revenue purposes to levy a tax upon each occupation engaged in by individuals within York City limits of $10 per year and exempting persons whose total income from all sources equals less than $1,000 per year. This Bill will also establish criteria for the following: Duty of Employers; Returns; Dates for Determining Liability; Individuals Engaged in More than one Occupation; Self-Employed Individuals; Non-Resident Employers and Self-Employed Individuals; Administration of Tax; Suits for Collection; Refunds; Refunds in Excess of Annual Limit; and establishes Penalties. The revenue expected to be received from this tax is estimated at $100,000. (Click here to view Bill). The Bill was introduced by Texter at the December 4, 2007 meeting of Council and read by short title. On motion of Texter, seconded by Smith, Bill No. 50 came up for discussion.

President Texter explained that a Business Administration committee meeting was held on December 18 at 6:00 p.m. to talk about this legislation. He then discussed an opinion on this law provided by Assistant Solicitor Shaleeta Washington. President Texter said in her opinion, Solicitor Washington, in a nutshell, opined that this law would “violate the Pennsylvania Constitution and it’s Uniformity Clause because the City of York would be treating similarly situated taxpayers differently and imposing different tax burdens upon them. In other words, employed residents working within the City of York would have a higher tax burden than those employed City of York residents who happen to be employed outside of the City.” President Texter said Council could amend Bill No. 50 to include an occupation tax on those employed City residents who work outside of the city. He did say that if approved, this would give the city the authority to collect occupation tax next year.

Vice President Musso said he would vote against this legislation though he understands the reasoning behind the legislation. Vice President Musso stated that he heard from citizens that they were insulted by this proposal. He said two years ago, this tax was changed from $10 a year to $52 a year, which our citizens understood and accepted. However, he said the consensus he’s received is that residents feel this is a sneaky tactic to get more money out of them. Our residents deserve some kind of relief, he said. Additionally, he reported that the Treasurer is concerned about how we will collect this tax and what costs would be involved to implement collection.

Councilwoman Smith said she would support this legislation and that the feedback she received from residents was the total opposite of what Vice President Musso said he received. She said this is a fair tax and that we all need to take part in helping to fund services provided to our residents and visitors.

Franklin Williams, 528 W. Market St., York, PA, discussed how this tax might affect landlords. He then said he also understands the concept of Bill No. 50, however, he said if he remembers correctly, when the Emergency and Municipal Services Tax (EMST) was implemented two years ago, we were excited about this tax because we were going to have outside visitors help with the burden of providing services. Unfortunately, he said, revenue generated from the EMST was not used for its intended purpose. Mr. Williams stated that you don’t create taxes to keep taxes down.

There being no further discussion, Bill No. 50 was defeated by the following vote: Yeas – Smith, Texter – 2; Nays – Musso, Smallwood – 2. President Texter said as the vote was tied, it is considered voted down. Therefore, Bill No. 50 is defeated.

Final Passage of Bill No. 51, Session 2007, A Bill establishing Article 355 "Realty Transfer Tax" of the Codified Ordinances for general revenue purposes to impose a tax upon the transfer of real estate or interest in real estate situated within York City limits regardless of where the documents making the transfers are made, executed or delivered, or where the actual settlements on such transfer took place as authorized by 72 P.S. §8101-d, et. Seq. This Bill will also establish definitions and criteria for the following: Imposition of Tax/Interest; Exempt Parties; Excluded Transactions; Documents Relating to Associations & Members, Partners, or Stockholders/Shareholders; Acquired Company; Credits Against Tax; Extension of Lease; Proceeds of Judicial Sale; Duties of the Recorder of Deeds; Statement of Value; Civil Penalties; Liens; Enforcement; Regulations; and Severability. The revenue expected to be received from this tax is estimated at $150,000. (Click here to view Bill) The Bill was introduced by Texter at the December 4, 2007 meeting of Council and read by short title. On motion of Texter, seconded by Smith, Bill No. 50 came up for discussion.

President Texter explained that a Business Administration committee meeting was held on December 18 at 6:00 p.m. to discuss this legislation. He said if approved, revenue would appear in the 2009 budget. He said the school district currently collects 100% of this tax and York is the only municipality in Pennsylvania that allows the school district to receive 100% of the revenue.

Vice President Musso said he would also be opposing this legislation because this Bill could be put into place at any time. He said there are various points in Bill No. 51 that he doesn’t approve (portions of Sections 355.04(c) and 355.17). He said we are surviving financially at this point and stated that he wants to further discuss this with members of the school board. Vice President Musso did say it is feasible that the city receives some of the revenue from this tax but feels its only fair to discuss this in an open forum with members of the school board.

Councilwoman Smith stated that the city is entitled to a portion of this revenue especially since the bulk of our budget goes towards public safety. We can’t afford to turn our backs on a possible $150,000 revenue stream, she said, however, she stated she would be willing to meet with school board members but ultimately feels there will be no resolution on revenue sharing.

Councilman Smallwood explained that the school district and city government are two separate entities. Historically, he explained, the city and school district would meet and come to a conclusion on taxes. Then when legislation was presented to Council, we would know exactly what we were voting on and where each entity stood on the legislation. This process hasn’t been done for the past 12 years, he said. Councilman Smallwood stated he would not support Bill No. 51 because he feels we are robbing Peter to pay Paul. He stated that the Mayor does not support this legislation and, therefore, it’s inappropriate for Council to vote on this.

President Texter said the Mayor told him he supported this legislation.

Tom Foust, Vice President of the York City School Board, agreed with Councilman Smallwood. He said the school district didn’t collect occupation tax because the city imposed that tax, which was an unwritten understanding. He then discussed other taxes and what taxing authorities imposed them. The school district has already set its 2008 tax rate based on preliminary numbers, which included projected revenue from the realty transfer tax. He said he feels it is imperative for us to sit down and talk about taxes and possible revenue sharing because an amenable process should be established.

Discussion ensued on past attempts to schedule meetings between the school board and Council. Mr. Foust said once Council is reorganized, he feels it best that the Presidents of both boards discuss meeting prospects.

There being no further discussion, Bill No. 51 was defeated by the following vote: Yeas – Smith, Texter – 2; Nays – Musso, Smallwood – 2. President Texter said as the vote was tied, it is considered voted down. Therefore, Bill No. 51 is defeated

Final Passage of Resolution No. 161, Session 2007, A Resolution Authorizing the York Adams Tax Bureau to collect Local Services Tax (Click here to view Resolution) and to continue its agreement to collect any unpaid Emergency and Municipal Services Tax, which was introduced by Texter at the December 4, 2007 meeting of Council and read at length, came up for final passage. On motion of Texter, seconded by Smallwood, Resolution No. 161 passed by the following vote: Yeas – Musso, Smith, Smallwood, Texter – 4; Nays – 0.

There being no further business, the December 27, 2007 Special Session of Council adjourned at 2:25 p.m.