To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Ordinance Amending Ordinance No. 2021-014 Regarding the Proposed Excise Tax on New Housing Construction (Second Reading - Approved on First Reading on September 21, 2021 by a vote 7-0)
Body
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Executive Summary
Town Council approved Ordinance 2021-014 on August 17, 2021 to ask Castle Rock voters to consider approval of an excise tax on new housing construction. This ordinance included the ballot question, plus information regarding how, if approved, this new tax would be assessed and accounted for. While the ballot question itself is correct, the ordinance inadvertently included incorrect information that affects the methodology for assessing the proposed tax. Essentially, the ordinance includes basement and garage square footage in the assessment of the proposed tax which are not needed to generate the needed amount of funding to support public safety needs as stated in the ballot question. Staff is seeking Town Council approval of a new ordinance correcting the definition of usable space that determines applicable square footage that would qualify for the proposed new housing construction tax.
Discussion
The purpose of the proposed new housing construction tax is to provide resources supporting public safety, including the addition of up to 75 new police and fire department personnel over the next five years. Ordinance 2021-014 includes the ballot question that will be considered by Castle Rock voters; and, identifies how the tax would be assessed and that it would be accounted for in a separate fund. The ballot question is correct in Ordinance 2021-014 and reflects the appropriate amount of funding that is needed to support public safety initiatives.
The initial projections for the new housing construction tax were based on average home size. This average included above grade, livable square footage only. Ordinance 2021-014, as approved by Town Council, inadvertently included all single-family square footage including garages and basements. The inclusion of garages and basements is not needed to generate the amount of funding as proposed in the ballot question. Therefore, staff recommends revising the approved ordinance to align with the intention of the ordinance. Below is a revised definition of usable space that is recommended for approval, with changes identified.
Usable space means the total square footage of the floor area enclosed within a building. The floor area shall be determined from the plans and specifications submitted to the Chief Building Official as a part of the application for a building permit, and shall include living spaces, storage, basements, restrooms, hallways, garages (attached or unattached if related to the dwelling), common areas, and similar spaces, as measured from the outside dimensions, BUT SHALL EXCLUDE BASEMENTS, WHETHER FINISHED OR UNFINISHED, AND GARAGES RELATED TO THE DWELLING, WHETHER ATTACHED OR UNATTACHED.
Amending the definition as recommended will result in a one-time tax amount of $15,400 for a 2,200 square foot home in Castle Rock (size includes above grade space only and excludes basement and garage). If voters approve the additional new housing construction tax, the actual amount per home will vary depending on actual square footage. Note that multifamily construction will also be assessed this tax in accordance with the revised definition of usable space.
Proposed Motion
“I move to approve the ordinance as introduced by title.”
Attachments
Attachment A: Ordinance