HomeMy WebLinkAbout09-12-16 CC Mtg - A1. Resolution 4709
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Administrative Services Director
SUBJECT: Commission Resolution No. 4709 – Setting Mill Levies for Fiscal Year
2016-2017 (FY17).
MEETING DATE: September 12, 2016
AGENDA ITEM: Action
RECOMMENDATION: Adopt Commission Resolution No. 4709 – Setting Mill Levies for
Fiscal Year 2016-2017 (FY17).
BACKGROUND: The Approved Budget for Fiscal Year 2017 (FY17) anticipated a 2%
increase in taxable value. It was developed with a mill value estimated = $88,295 and an
estimated maximum tax levy of 229.74 mills. During budget adoption, there was a fair amount of
policy discussion regarding:
• The approved motion from August 2015, that Commissioners would levy 3.23 mills
lower than the cap (passed 8/31/2015), and
• The desire to levy below our maximum mill-levy this year in order to leave room to
support the operating costs of the Law & Justice Campus project in future years.
CERTIFIED VALUES & MAXIMUM MILL LEVY: On August 1, 2016, the City received its
official certification of taxable values for FY17, issued by the Department of Revenue (DOR.)
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We had questions for the Department about the changes in tax increment district values and
newly taxable property values. On August 15, 2016 we received a corrected certification of
taxable values for FY17 from the DOR. In that process, it was also stated that an error had
occurred in last year’s valuation of newly taxable property. On Friday, August 26, the DOR
emailed “Corrected 2015 Newly Taxable Value” information for the City. We have used this
corrected information to calculate the City’s maximum authorized mill levy.
• The correction to the 2015 Newly Taxable Value has the effect of lowering the City’s FY16
maximum mill levy by 1.01 mills. However, last year’s tax levy did not exceed this adjusted
cap. Last year the city did not levy the maximum amount; our levy was below the then-
calculated maximum by 13.19 mills (4.19 mills in General Fund – All-purpose authority, and
9 mills relating to the 911 commitment.)
The FY17 certification puts the value of 1 mill levied on all taxable property in the city =
$89,758; this is an increase of 3.7% from last year’s certified value. The certification, along
with the FY16 correction, puts the City’s maximum tax levy for FY17 at 222.14 mills, a
reduction of 7.60 mills from our budget estimates.
CURRENT BUDGET EFFECTS: With the certified value higher than we projected, the City
could generate an additional $167,000 in revenue for the General Fund, beyond what was
budgeted. However, with the reduced maximum levy (levy cap,) it would require us to levy all
of our authorized mills, after factoring out our 9-mill commitment for the county-wide 911
center.
The attached mill levy Resolution has been developed based on the following recommendations:
1. Reduction of 9 mills, in accordance with our 9-mill commitment for the county-wide 911
center; and
2. A mill levy that will be 3.23 mills less than the maximum, in accordance with the August
2015 vote. These are mills that could be levied in the future.
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In order to achieve this levy, we will be short of our budgeted revenues by approximately
$124,000 for the year (0.4% of General Fund revenues.) We are recommending that amount be
covered by cash-carryover from FY16. When the FY17 budget was developed, we did not factor
in any budget savings in the General Fund that might come from unspent resources in FY16.
Now that the fiscal year is concluded, we are able to estimate that approximately $540,000 of
General Fund cash will carry-over into FY17. We recommend relying on this carry-over to
establish a lower tax levy for FY17. (If so, the amount of remaining cash carryover that would
add to the General Fund reserve would total $416,000, the equivalent of 4.63 mills.)
Tonight’s hearing has been advertised so that the Commission may make the maximum levy – or
an amount lower than our recommendation.
LEVY DETAILS: Under state law, the City’s maximum allowable mill levy for FY17 is
calculated to be 222.14 mills. The recommended mill levy for this year is: 209.91 mills.
This is 0.25 mills less than last year’s mill levy.
From FY17 Certified
Value
Levy Purpose Number of Mills
All Purpose Levy 152.82
Community/Workforce Housing 3.00
Permissive Medical Insurance 26.40
Planning 2.00
Senior Transportation 1.00
Fire Equipment 4.00
Stormwater Project – Landfill Loan 1.56
Monitoring – Landfill 4.00
Library GO Bonds 3.07
Park and Trail GO Bonds 12.06
Grand Total Levied 209.91
Amounts recommended not levied total: 12.23 mills.
From FY17 Certified
Value
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Purpose Number of Mills
General Fund – All Purpose Levy, not levied 3.23
911 Mills (Resolution No. 3954) 9.00
Grand Total NOT Levied 12.23
A levy of 209.91 mills is:
1. Lower than the maximum levy amount by 12.23 mills; and yields $124,000 less than was
estimated in the Approved Budget.
2. Lower than our estimate at final budget approval by 4.73 mills; approximately 2.2%
lower.
3. Lower than last year’s levy by 0.25 mills; a 0.1% decrease in the number of mills levied
for this year over last year.
The full details of prior years’ mill levies can be seen on the attachment to this memo labeled
“Mill Levies & Mill Values.” A number of factors account for the change this year:
• In general, levy amounts that bring in a fixed number of dollars have been
decreased to reflect the increase in the value of one mill.
• An amount is now specified for Monitoring at the Landfill, which comes from our
all-purpose taxing authority.
209.91 210.16
188.76 173.08 166.75 166.75 168.75 170.19 171.16 154.18
0.00
50.00
100.00
150.00
200.00
250.00
FY17 FY16 FY15 FY14 FY13 FY12FY11FY10FY09FY08
City's Total Tax Levy, in mills
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Difference between Statutory Maximum and amount levied this year:
The City’s proposed levy is lower than the maximum allowable levy by a total of 12.32 mills:
• 9 mills – commitment under Resolution No. 3954, related to the county-wide 911
mill levy, ($795,000.) In September 2006, the Commission resolved to lower the
City’s levy by 9 mills if the county-wide levy for 911 Dispatch & Records
Services was approved by the voters. The county-wide levy was approved, 911
Dispatch/Records is no longer paid for out of the City’s General Fund.
• 3.23 mills – reduced during the FY17 Budget adoption and levy adoption. This is
a result of General Fund budget requests being cut and a desire to not levy the
maximum number of mills. At the time of budget development, we estimated that
this amount of “room” between the actual levy and the maximum levy would be
higher.
The attached resolution anticipates levying 209.91 mills.
FY17 Maximum Levy in Mills 222.14
General Fund Cuts (3.23)
County 911-Records (9.00)
FY17 Proposed Levy in Mills 209.91
FY16 Levy in Mills 210.16
Difference between FY16 & FY17 in Mills -0.25
Difference in Dollars (increased mill value, new
construction, etc.)
+$649,289
Tax Increment Finance Districts: One of the elements of our certified values that is difficult to
gauge is now much of our new construction will occur in the Tax Increment Finance (TIF)
Districts and how much will be out of the districts, and therefore part of the city-wide mill levy.
Also difficult to gauge is how changes in tax policy and valuation effect each of these small
districts.
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This year saw our Tax Increment Finance District certified values yield some unexpected results;
we saw reductions in both the Northeast and Midtown TIF’s increment values and a growth in
the Mandeville Farm TIF. The South Bozeman Tech TIF continues to have zero incremental
value.
Taxable Values FY17
City - Gross Dollars of Taxable Value $94,102,761
Less: Downtown TIF Taxable Value 3,068,902
Less: Northeast TIF Taxable Value 193,281
Less: Midtown TIF Taxable Value 1,003,546
Less: Mandeville Farm TIF Taxable Value 78,606
Less: South Bozeman Tech TIF Taxable
Value
-
Less: Total of TIF's Taxable Value 4,344,335
City - Net Dollars of Taxable Value $89,758,426
Change in Taxable Value from Previous Year FY17
City - Gross % 3.7%
Downtown TIF 5.9%
Northeast TIF -9.9%
Midtown TIF -4.9%
Mandeville Farm TIF 42.4%
South Bozeman Tech TIF -
City - Net % 3.7%
FISCAL EFFECTS: Adopting a mill levy of 209.91 mills is estimated to generate
$18,841,000 in property tax revenue for FY17. The revenue will be deposited to the funds
described on the attached “Mill Levies & Mill Values” sheet.
During budget preparation, we were estimating the median homeowner’s property taxes paid to
the City at $3.46/mill. Information from the DOR indicates that the number is $3.23/mill. The
tables below have been updated to reflect the lower amount.
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Final Final Budget &
Typical Resident - Annual Cost FY16 Budget Final Tax Levy FY17
Street Maintenance Assessments $147.17 $22.07 $22.07 $169.24
Arterial Street Assessment $21.54 $19.79 $19.79 $41.33
Forestry Assessments $17.00 $3.83 $3.83 $20.83
Property Taxes $678.80 $15.80 ($0.79) $678.01
Water Services $493.80 $12.36 $12.36 $506.16
Sewer Services $577.56 $17.28 $17.28 $594.84
Storm Water Services $70.92 $0.00 $0.00 $70.92
Total Taxes, Fees, Assessments $2,006.79 $91.13 $74.54 $2,081.33 3.7%
A typical resident (median home) would pay an annual property tax of $678 to the City for Tax
Year 2016. This is a decrease of $0.79 for the tax year. We were estimating an increase in
property taxes during the Final Budget Adoption. This change is the direct result of the higher-
than-expected certified taxable value and lower-than expected mill levy.
The effect of this levy on the typical residential property owner is an approximate 0.1% decrease
in property taxes from last year. (Annual $680 property taxes in FY16.)
ALTERNATIVES: As suggested by the City Commission.
Attachment: Commission Resolution No. 4709
FY17 Mill Levies and Mill Values Bozeman Taxable Values History Department of Revenue Certified Value Tax Year 2016
Corrected Department of Revenue Certified Value Tax Year 2016
Email Communication regarding Newly Taxable Values for 2015
Report compiled on August 24, 2016
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1 of 4
COMMISSION RESOLUTION NO. 4709
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA ESTABLISHING AND AFFIXING THE
NUMBER OF MILLS TO BE CHARGED AGAINST THE ASSESSED
VALUATION OF ALL TAXABLE PROPERTY SITUATED WITHIN THE
CORPORATE JURISDICTIONAL BOUNDARIES OF THE CITY FOR FISCAL YEAR 2016-2017 (FY17).
WHEREAS, in accordance with 15-10-203 MCA, after due and proper legal notice, at a
regular session of the City Commission on September 12, 2016, the public hearing on the proposed
change of ad-valorem tax revenue was held; and
WHEREAS, the Montana Department of Revenue issued to the City a 2016 Certified
Taxable Valuation received on August 1, 2016; and
WHEREAS, the Montana Department of Revenue issued to the City a corrected 2016
Certified Taxable Valuation received on August 15, 2016, and a corrected Newly Taxable Property
value for 2015 on August 26, 2016; and
WHEREAS, the City has to incorporated the correct Newly Taxable Property value for
2015 into its calculation of maximum mill levy: and
WHEREAS, in accordance with Montana Code Annotated, a resolution must be adopted
by the City Commission in order to determine the amount of the City or Town taxes to be levied
and assessed on the taxable property situated within the City for the current fiscal year; and
WHEREAS, the City Clerk must certify to the County Clerk a copy of such resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
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Resolution No. 4709, Establishing and Affixing the Number of Mills
2 of 4
Bozeman, Montana as follows:
Section 1
That for the purpose of providing and maintaining basic City services the City Commission of the City of Bozeman, Montana does hereby affix 152.82 mills to be levied for the All Purpose General Fund for all salaries, operations, and capital expenditures for general government purposes
as provided by Sections 7-6-4451 and 15-10-420 MCA.
Section 2 That the City Commission of the City of Bozeman, Montana does hereby affix a 3.00
mill levy from the City’s maximum mill levy allowed under Sections 7-6-4451 and 15-10-420
MCA for the City’s Community Housing Fund to be used for affordable/workforce housing
purposes within the City.
Section 3 That the City Commission of the City of Bozeman, Montana does hereby establish and
affix a mill levy in the amount of 26.40 mills to provide for the total City payment of premiums
for Health Medical Insurance for City employees in accordance with Title 2 Chapter 18 Part 7 MCA, Section 2 of Chapter 359 Laws 1975, Section 7-32-4117 MCA, and Section 7-3-4130 MCA.
Section 4
That the City Commission of the City of Bozeman, Montana does hereby establish and affix a mill levy in the amount of 2.00 mills to provide funds for the City Planning Activity in accordance with Section 76-1-406 MCA.
Section 5
That the City Commission of the City of Bozeman, Montana does hereby establish and affix a mill levy in the amount of 1.00 mills to provide funds for special transportation services for senior citizens and persons with disabilities in accordance with Section 7-14-1111 MCA.
Section 6
That the City Commission of the City of Bozeman, Montana does hereby affix a 1.56 mill levy from the City’s maximum mill levy allowed under Sections 7-6-4451 and 15-10-420
MCA for the general purpose of the stormwater system, to include the stormwater improvement
program for corrective measures at the Bozeman Story Mill Landfill, served by the stormwater
system, with the funds appropriated, to pay a portion of the costs, in accordance with 7-7-4424
(b) MCA.
Section 7 That the City Commission of the City of Bozeman, Montana does hereby establish and
affix a mill levy in the amount of 3.07 mills to provide for principal and interest payments on
outstanding Library General Obligation Bonds in accordance with Section 7-7-4265 MCA. Section 8
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Resolution No. 4709, Establishing and Affixing the Number of Mills
3 of 4
That the City Commission of the City of Bozeman, Montana does hereby establish and
affix a mill levy in the amount of 12.06 mills to provide for principal and interest payments on
outstanding Trails, Open Space and Parks (TOP) General Obligation Bonds in accordance with
Section 7-7-4265 MCA.
Section 9 That for the purpose of providing and maintaining basic City services the City Commission of the City of Bozeman, Montana does hereby affix 4.00 mills to be levied for the
Fire Department Capital & Equipment Replacement for general government purposes as provided by Section 7-6-4451 MCA.
Section 10
That the City Commission of the City of Bozeman, Montana does hereby affix a 4.00
mill levy from the City’s maximum mill levy allowed under Sections 7-6-4451 and 15-10-420 MCA for the costs of Landfill Post-closure activities at the Story Mill Landfill. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana
at a regular session thereof held on the 12th day of September, 2016.
__________________________________
CARSON TAYLOR
Mayor
ATTEST:
_____________________________________
ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN City Attorney
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Resolution No. 4709, Establishing and Affixing the Number of Mills
4 of 4
CITY OF BOZEMAN
Mill Levy Fiscal Year 2016-2017 (FY17)
Levy Purpose Number of Mills
All Purpose Levy 152.82 Workforce/Community Housing 3.00
Permissive Medical Insurance 26.40
Planning 2.00
Senior Transportation 1.00
Trails, Open Space, & Parks GO Bonds 12.06 Library GO Bonds 3.07
Stormwater - Story Mill Landfill Project
Fire Capital & Equipment
Landfill Post-closure Activities
1.56
4.00
4.00
TOTAL LEVY 209.91 mills
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MILL LEVIES AND MILL VALUES
FISCAL YEAR FY12 FY13 FY14 FY15 FY16 FY17
MILL VALUE (net of TIFD's) 82,062$ 83,226$ 85,637$ 87,894$ 86,564$ 89,758$
Issued 9/2011
PERCENTAGE CHANGE 2.1% 1.4% 2.9% 2.6% -1.5% 3.7%
GENERAL FUND:
All-Purpose 127.16 127.66 134.76 144.77 155.78 152.82
SPECIAL REVENUE:
City Planning 2.00 2.00 2.00 2.00 2.00 2.00
Local Government Study Commission
Health/Med Insurance 22.53 23.22 22.57 23.18 27.11 26.40
Fire Capital & Equipment 4.00 4.00 4.00 4.00 4.00 4.00
Transfer to Stormwater - Landfill Project 0.00 0.00 0.00 1.57 1.62 1.56
Transfer to Landfill Closure - Monitring 4.00
Senior Transportation 1.00 1.00 1.00 1.00 1.00 1.00
Workforce Housing 0.50 0.50 0.50 1.00 3.00 3.00
TOTAL SPECIAL REVENUE 30.03 30.72 30.07 32.75 38.72 41.96
DEBT SERVICE:
Park & Trail G.O.Bonds 0.00 8.13 12.49 12.06
Library G.O. Bonds 3.84 3.30 3.06 3.11 3.16 3.07
Transportation G.O. Bonds 5.72 5.07 5.19 0.00 0.00 0.00
TOTAL DEBT SERVICE 9.56 8.37 8.25 11.24 15.65 15.13
TOTAL ALL LEVIES 166.75 166.75 173.08 188.76 210.16 209.91
Percentage Change in Mills -1.2% 0.0% 3.8% 9.4% 12.4% -0.1%
Property Taxes Levied $13,683,839 $13,878,293 $14,821,724 $16,590,871 $18,191,892 $18,841,181
Percentage Change in Dollars 0.9% 1.4% 6.8% 11.9% 9.7% 3.6%
* These funds are being combined into the All Purpose Levy. They are all subject to MCA 15-10-420.
Tax Authority Authorized but Not Levied
General Fund Reduction 462720 694,976$ 1,263,330$ 1,271,667$ 363,096$ 290,000$
Street & Tree Maintenance Offset 116270 -$ -$ -$ -$ -$
Police & Fire Reductions 849000 914,000$ 578,525$ -$ -$ -$
SAFER Grant 189,720 113,985$ -$ -$ -$ -$
911 Mills (Resolution No. 3954) 723,303 738,558$ 749,034$ 770,733$ 779,076$ 807,822$
FY11 Certification Error: 59,753
Total Authorized But Not Levied 2,400,766$ 2,461,995$ 2,590,889$ 2,042,400$ 1,142,172$ 1,097,822$
Number of Mills 20.32 29.58 31.13 23.85 13.19 12.23
***AFTER 8/15 CERTIFICATION
MILL LEVIES & MILL VALUES
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City of BozemanTaxable Values HistoryTax Yr 2016 Tax Yr 2015 Tax Yr 2014 Tax Yr 2013 Tax Yr 2012 Tax Yr 2011 Tax Yr 2010 Tax Yr 2009 Tax Yr 2008 Tax Yr 2007FY17 - 8/15 Cert FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08City - Gross Dollars of Taxable Value 94,102,761 90,787,797 $ 92,081,322 $ 89,650,917 $ 86,934,533 $ 85,345,227 $ 83,309,165 $ 80,850,582 $ 75,458,468 $ 70,016,605 Less: Downtown TIF Taxable Value 3,068,902 2,898,551 2,718,220 2,586,963 2,396,293 2,251,286 2,060,807 1,947,249 1,115,768 931,030 Less: Northeast TIF Taxable Value 193,281 214,470 190,579 172,608 150,217 133,197 135,162 104,987 71,287 48,790 Less: Midtown TIF Taxable Value 1,003,546 1,055,385 1,225,604 1,193,297 1,084,216 840,137 664,127 450,625 93,316 55,532 Less: Mandeville Farm TIF Taxable Value 78,606 55,211 52,376 60,693 77,412 58,146 50,554 57,740 - - Less: South Bozeman Tech TIF Taxable Value - - 2 Less: Total of TIF's Taxable Value 4,344,335 4,223,617 4,186,781 4,013,561 3,708,138 3,282,766 2,910,650 2,560,601 1,280,371 1,035,352 City - Net Dollars of Taxable Value $ 89,758,426 $ 86,564,180 $ 87,894,543 $ 85,637,356 $ 83,226,395 $ 82,062,461 $ 80,398,515 $ 78,289,981 $ 74,178,097 $ 68,981,253 Tax Dollars Generated from 1 Mill: $ 89,758 $ 86,564 $ 87,895 $ 85,637 $ 83,226 $ 82,062 $ 80,399 $ 78,290 $ 74,178 $ 68,981 Change in Taxable Value from Previous Year Tax Yr 2016 Tax Yr 2015 Tax Yr 2014 Tax Yr 2013 Tax Yr 2012 Tax Yr 2011 Tax Yr 2010 Tax Yr 2009 Tax Yr 2008 Tax Yr 2007 FY17 - 8/15 Cert FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08City - Gross % 3.7% -1.4% 2.7% 3.1% 1.9% 2.4% 3.0% 7.1% 7.8% - Downtown TIF 5.9% 6.6% 5.1% 8.0% 6.4% 9.2% 5.8% 74.5% 19.8% - Northeast TIF -9.9% 12.5% 10.4% 14.9% 12.8% -1.5% 28.7% 47.3% 46.1% - Midtown TIF -4.9% -13.9% 2.7% 10.1% 29.1% 26.5% 47.4% 382.9% 68.0% - Mandeville Farm TIF 42.4% 5.4% -13.7% -21.6% 33.1% 15.0% -12.4% - - - South Bozeman Tech TIF - - -City - Net % 3.7% -1.5% 2.6% 2.9% 1.4% 2.1% 2.7% 5.5% 7.5% 9.1%Change3,314,964$ (1,293,525)$ 2,430,405$ 2,716,384$ 1,589,306$ 2,036,062$ 2,458,583$ 5,392,114$ 5,441,863$ Change in TIFs120,718 36,836 173,220 305,423 425,372 372,116 350,049 1,280,230 245,019 Change in Net3,194,246$ (1,330,363)$ 2,257,187$ 2,410,961$ 1,163,934$ 1,663,946$ 2,108,534$ 4,111,884$ 5,196,844$ TIF's combined growth as a % of Total Growth 3.6% -2.8% 7.1% 11.2% 26.8% 18.3% 14.2% 23.7% 4.5% City Newly Taxable Property 3,279,600 4,563,975 2,642,222 1,462,894 1,067,303 1,108,883 2,526,037 % of prior year 72% 173% 181% 137% 96% 44%$89,758 $86,564 $87,895 $85,637 $83,226 $82,062 $80,399 $78,290 $74,178 $68,981 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 $85,000 $90,000 $95,000FY17 - 8/15CertFY16FY15FY14FY13FY12FY11FY10FY09FY08Taxes Generated from 1 Mill City-Wide232
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1
Anna Rosenberry
From:Crepeau, Michele <mcrepeau@mt.gov>
Sent:Friday, August 26, 2016 11:13 AMTo:Anna RosenberryCc:Kadas, Mike; Walborn, Gene; Moore, Cynthia; Whyte, Daniel; Olson, Mark; Elliott, JohnSubject:Newly Taxable Values
Dear Anna,
Below is the newly taxable value for 2015 as if the newly taxable value of the Bozeman Downtown TIFD had been
removed. By providing this calculation, it is for informational purposes only. The Department is not opining on the
question of whether recertification is legally possible or necessary, nor is it a recertification of the 2015 values.
The 2015 Newly Taxable calculation included the Bozeman Downtown TIFD. The 2016 Newly Taxable calculation
excluded the Bozeman Downtown TIFD. The numbers are as follows:
Year Original 2015 Corrected 2015 Difference
Newly Taxable 5,030,906 4,563,975 (466,932)
We are available for questions, should you wish to discuss the calculations.
Sincerely,
Michele R. Crepeau
Senior Tax Counsel
Montana Department of Revenue
P.O. Box 7701
Helena, MT 59604-7701
T. 406.444.3341
mcrepeau@mt.gov
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