HomeMy WebLinkAbout08-28-17 City Commission Packet Materials - A3. Resolution 4821, Establishing Mill Levies
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Assistant City Manager
Kristin Donald, Finance Director
SUBJECT: Commission Resolution No. 4821 – Setting Mill Levies for Fiscal Year
2017-2018 (FY18).
MEETING DATE: August 28, 2017
AGENDA ITEM: Action
RECOMMENDATION: Adopt Commission Resolution No. 4821 – Setting Mill Levies for
Fiscal Year 2017-2018 (FY18).
BACKGROUND: The Approved Budget for Fiscal Year 2018 (FY18) anticipated a 4%
increase in taxable value. It was developed with a mill value estimated = $92,915 and an
estimated maximum tax levy of 205.3 mills. During budget adoption, there was a fair amount of
policy discussion regarding:
• The desire to keep the property tax the same as it was last year for the median
homeowner, and
• The uncertainty about the change in the City’s taxable values from both new
construction and market appreciation that would be captured with the State’s reappraisal
cycle this year.
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CERTIFIED VALUES & MAXIMUM MILL LEVY: On August 3, 2017, the City received its
official certification of taxable values for FY18, issued by the Department of Revenue (DOR.)
We had questions for the Department about changes that had been made to the State’s required
calculation of the City’s maximum tax levy. Those questions were answered, and going forward
will make some slight changes to our tax levy calculation each year regarding the inflation factor
and our carry-over mills.
The FY18 certification puts the value of 1 mill levied on all taxable property in the city =
$101,195; this is an increase of 13.3% from last year’s certified value. Of that increase, 3.8% is
attributed to new construction and the remaining amount is the net effect of changes in market
valuations across the City, as determined by the Department of Revenue. We were expecting to
see market appreciation due to the property tax appraisal cycle occurring this year.
The certification puts the City’s maximum tax levy for FY18 at 205.30 mills (purely a
coincidence that it mirrors the number we discussed at Final Budget time.) Under or existing
911 Levy commitment to reduce our maximum levy by 9 mills, 196.30 would be the maximum
amount the City would levy.
$83,226 $85,637 $87,894 $86,564 $89,325
$101,195
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
FY13 FY14 FY15 FY16 FY17 FY18
Taxes Generated from 1 Mill City-Wide
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CURRENT BUDGET EFFECTS: During the adoption of the Final Budget, we estimated a
total of $14,313,000 in property tax revenue going to the General Fund, and an ending General
Fund balance that exceeded our minimum reserve level by $492,500.
With our new certified valuation, a total of $15,018,000 could be levied for the General Fund.
This is a difference between our maximum-allowed levy and our proposed levy of $705,000
(6.97 mills)
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 generates $14,313,000 in property tax revenue for the General Fund.
Tonight’s hearing has been advertised so that the Commission may make the maximum
levy (excepting the 911 commitment) or any amount below the maximum levy.
INFORMATION REGARDING PROPERTY VALUATION: We received a complete, updated
set of data from the Department for all properties on the 2017 tax roll, except Centrally Assessed
information. In this data set, we also receive 2015 and 2016 parcel information. We have spent
time examining the data in order to understand the effects of the reappraisal on our tax base. The
effects of the reappraisal are very specific to each property – and will effect individual property
owners in different ways. We see a high degree of variation in the changes to property values.
According to the information, our 2015 Median Residential property was valued at $249,000.
The new median property value has increased to $292,000. Some of that increase is due to
general appreciation in market values and some of that change is due to the fact that new
properties have been added to the tax base since 2015, and many of those properties have a value
that is higher than the 2015 median.
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Residential Property Value Details – Median 2015 Median Residential Property - Taxable Market Value $249,000 2017 Median Residential Property - Taxable Market Value $292,000 Change in Median Residential Property 17% 2017 Median Residential Property (Taxable Market Value)
without new construction from 2016 or 2017 $274,000
Change in Median Property without new construction 10%
LEVY DETAILS: Under state law, the City’s maximum allowable mill levy for FY18 is
calculated to be 205.30 mills. The recommended mill levy for this year is: 189.33 mills.
This is 15.97 mills below last year’s levy.
From FY18 Certified
Value
Levy Purpose Number of Mills
All Purpose Levy 136.39
Community/Workforce Housing 3.00
Permissive Medical Insurance 24.48
Planning 2.00
Senior Transportation 1.00
Fire Equipment 4.00
Stormwater Project – Landfill Loan 1.38
Monitoring – Landfill 3.67
Library GO Bonds 2.73
Park and Trail GO Bonds 10.68
Grand Total Levied 189.33
Amounts recommended not levied total: 15.97 mills. The City has a history of levying less
than our maximum mill levy.
From FY17 Certified
Value
Purpose Number of Mills
General Fund – All Purpose Levy, not levied 6.97
911 Mills (Resolution No. 3954) 9.00
Grand Total NOT Levied 15.97
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A levy of 189.33 mills is:
1. Lower than the maximum levy amount by 15.97 mills; and yields the same amount as
was estimated in the Approved Budget.
2. Lower than our estimate at final budget approval by 15.97 mills; approximately 7.8%
lower.
3. Lower than last year’s levy by 15.97 mills; a 7.8% 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:
• Increased value of one mill levied on all property in the City, and
• 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.
As you can see from the details of past levies, the City has a history of not levying our maximum
mills, even beyond our 911 9-mill commitment.
189.33 205.30 210.16 188.76 173.08 166.75 168.75 170.19 171.16
0.00
50.00
100.00
150.00
200.00
250.00
FY18 FY17 FY16 FY15 FY14 FY13FY11FY10FY09
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 15.97 mills:
• 9 mills – commitment under Resolution No. 3954, related to the county-wide 911
mill levy, ($901,755.) 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.
• 6.97 mills – amount remaining in our maximum authorized levy and what was
estimated in the adopted Final Budget.
The attached resolution anticipates levying 189.33 mills.
FY18 Maximum Levy in Mills 205.30
General Fund - Not Levied (6.97)
County 911-Records (9.00)
FY18 Proposed Levy in Mills 189.33
FY17 Levy in Mills 205.30
Difference between FY17 & FY18 in Mills (15.97)
Difference in Dollars (increased mill value, new
construction, etc.)
+$820,246
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.
166.75 173.08 188.76 210.16 205.30 189.33
29.58 31.13 23.85 13.19 16.88 15.97
FY13 FY14 FY15 FY16 FY17 FY18
City of Bozeman Tax Levy
Mills Not Levied
Mills Levied
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Also difficult to gauge is how changes in tax policy and valuation effect each of these small
districts.
Below are the specific details of the certified values, and changes in values, for our Tax
Increment Districts. The South Bozeman Technology TIF continues to have no incremental
value.
Taxable Values FY18
City - Gross Dollars of Taxable Value $106,224,806
Less: Downtown TIF Taxable Value 3,769,917
Less: Northeast TIF Taxable Value 223,765
Less: Midtown TIF Taxable Value 948,716
Less: Mandeville Farm TIF Taxable Value 87,633
Less: South Bozeman Tech TIF Taxable Value -
Less: Total of TIF's Taxable Value 5,030,031
City - Net Dollars of Taxable Value $101,194,775
Change in Taxable Value from Previous Year FY18
City - Gross % 13.4%
Downtown TIF 22.8%
Northeast TIF 15.8%
Midtown TIF -5.5%
Mandeville Farm TIF 11.5%
South Bozeman Tech TIF -
City - Net % 13.3%
FISCAL EFFECTS: Adopting a mill levy of 189.33 mills is estimated to generate a
total of $19,158,747 in property tax revenue for FY18. This money includes the amounts to the
General Fund, as well as our debt service and other special purpose funds. The revenue will be
deposited to the funds described on the attached “Mill Levies & Mill Values” sheet.
226
Effect on Median Residential Property: During budget preparation, we were estimating the
median homeowner’s property taxes paid to the City at $3.23/mill, with a total of $665 paid in
property taxes. This was based on the median residential property with a taxable market value of
$240,000 (as previously reported to us by Department of Revenue.) The data set of taxable
values for residential property this year shows that the median residential property in Bozeman
has a taxable market value of roughly $292,000. This median property would pay $3.94/mill
levied by the City, or $745 in property taxes to the City for the year.
Excluding the effects of new construction parcels on our Median, a residential property valued at
$274,000 would pay $3.70/mill or $700 in property taxes to the City for the year.
A residential property valued at $240,000 would pay $3.23/mill or $612 in property taxes to the
City for the year.
ALTERNATIVES: As suggested by the City Commission.
Attachment: Commission Resolution No. 4821
FY18 Mill Levies and Mill Values
Bozeman Taxable Values History
Department of Revenue Certified Value Tax Year 2017 Report compiled on August 18, 2017
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Page 1 of 5
COMMISSION RESOLUTION NO. 4821
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 2017-2018 (FY18).
WHEREAS, in accordance with 15-10-203 MCA, after due and proper legal notice, at a
regular session of the City Commission on August 28, 2017, 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 2017 Certified
Taxable Valuation received on August 3, 2017; 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
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 136.39 mills to be levied for the All Purpose
General Fund for all salaries, operations, and capital expenditures for general government purposes
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Resolution No. 4821, Establishing and Affixing the Number of Mills
Page 2 of 5
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 24.48 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 1.38
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Resolution No. 4821, Establishing and Affixing the Number of Mills
Page 3 of 5
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 2.73 mills to provide for principal and interest payments on
outstanding Library General Obligation Bonds in accordance with Section 7-7-4265 MCA.
Section 8
That the City Commission of the City of Bozeman, Montana does hereby establish and
affix a mill levy in the amount of 10.68 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 3.67
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.
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Resolution No. 4821, Establishing and Affixing the Number of Mills
Page 4 of 5
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana at a regular session thereof held on the 28th day of August, 2017.
__________________________________
CARSON TAYLOR Mayor
ATTEST:
_____________________________________ ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN City Attorney
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Resolution No. 4821, Establishing and Affixing the Number of Mills
Page 5 of 5
CITY OF BOZEMAN
Mill Levy Fiscal Year 2017-2018 (FY18)
Levy Purpose Number of Mills
All Purpose Levy 136.39 Workforce/Community Housing 3.00
Permissive Medical Insurance 24.48
Planning 2.00 Senior Transportation 1.00 Trails, Open Space, & Parks GO Bonds 10.68 Library GO Bonds 2.73
Stormwater - Story Mill Landfill Project
Fire Capital & Equipment Landfill Post-closure Activities
1.38
4.00 3.67
TOTAL LEVY 189.33 mills
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MILL LEVIES AND MILL VALUES
FISCAL YEAR FY13 FY14 FY15 FY16 FY17 FY18
MILL VALUE (net of TIFD's) 83,226$ 85,637$ 87,894$ 86,564$ 89,325$ 101,195$
Corr 10/2016
PERCENTAGE CHANGE 1.4% 2.9% 2.6% -1.5% 3.2% 13.3%
GENERAL FUND:
All-Purpose 127.66 134.76 144.77 155.78 148.21 136.39
SPECIAL REVENUE:
City Planning 2.00 2.00 2.00 2.00 2.00 2.00
Local Government Study Commission
Health/Med Insurance 23.22 22.57 23.18 27.11 26.40 24.48
Fire Capital & Equipment 4.00 4.00 4.00 4.00 4.00 4.00
Transfer to Stormwater - Landfill Project 0.00 0.00 1.57 1.62 1.56 1.38
Transfer to Landfill Closure - Monitring 4.00 3.67
Senior Transportation 1.00 1.00 1.00 1.00 1.00 1.00
Workforce Housing 0.50 0.50 1.00 3.00 3.00 3.00
TOTAL SPECIAL REVENUE 30.72 30.07 32.75 38.72 41.96 39.53
DEBT SERVICE:
Park & Trail G.O.Bonds 0.00 8.13 12.49 12.06 10.68
Library G.O. Bonds 3.30 3.06 3.11 3.16 3.07 2.73
Transportation G.O. Bonds 5.07 5.19 0.00 0.00 0.00 0.00
TOTAL DEBT SERVICE 8.37 8.25 11.24 15.65 15.13 13.41
TOTAL ALL LEVIES 166.75 173.08 188.76 210.16 205.30 189.33
Percentage Change in Mills 0.0% 3.8% 9.4% 12.4% -2.6% -7.6%
Property Taxes Levied $13,878,293 $14,821,724 $16,590,871 $18,191,892 $18,338,501 $19,158,747
Percentage Change in Dollars 1.4% 6.8% 11.9% 9.7% 0.8% 4.5%
* These funds are being combined into the All Purpose Levy. They are all subject to MCA 15-10-420.
Tax Authority Authorized but Not Levied
General Fund Reduction 694976 1,263,330$ 1,271,667$ 363,096$ 703,800$ 705,500$
Street & Tree Maintenance Offset 0 -$ -$ -$ -$ -$
Police & Fire Reductions 914000 578,525$ -$ -$ -$ -$
SAFER Grant 113,985 -$ -$ -$ -$ -$
911 Mills (Resolution No. 3954) 738,558 749,034$ 770,733$ 779,076$ 803,925$ 910,755$
FY11 Certification Error:
Total Authorized But Not Levied 2,461,995$ 2,590,889$ 2,042,400$ 1,142,172$ 1,507,725$ 1,616,255$
Number of Mills 29.58 31.13 23.85 13.19 16.88 15.97
From 8/3/2017 Valuation MILL LEVIES & MILL VALUES
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City of BozemanTaxable Values HistoryTax Yr 2017 Tax Yr 2016 Tax Yr 2015 Tax Yr 2014 Tax Yr 2013FY18 - 8/3 Cert FY17 - N.W.E Effects FY16 FY15 FY14Total Market Value $ 6,745,351,312 $ 5,870,738,906 $ 5,698,588,679 $ 3,598,269,877 $ 3,386,295,608 Change in Total Market Value 14.9% 3.0% 58.4% 6.3% 6.6%City - Gross Dollars of Taxable Value 106,224,806 93,669,761 90,787,797 $ 92,081,322 $ 89,650,917 Less: Downtown TIF Taxable Value 3,769,917 3,068,902 2,898,551 2,718,220 2,586,963 Less: Northeast TIF Taxable Value 223,765 193,281 214,470 190,579 172,608 Less: Midtown TIF Taxable Value 948,716 1,003,546 1,055,385 1,225,604 1,193,297 Less: Mandeville Farm TIF Taxable Value 87,633 78,606 55,211 52,376 60,693 Less: South Bozeman Tech TIF Taxable Value - - - 2 Less: Total of TIF's Taxable Value 5,030,031 4,344,335 4,223,617 4,186,781 4,013,561 City - Net Dollars of Taxable Value $ 101,194,775 $ 89,325,426 $ 86,564,180 $ 87,894,543 $ 85,637,356 Tax Dollars Generated from 1 Mill: $ 101,195 $ 89,325 $ 86,564 $ 87,895 $ 85,637 Change in Taxable Value from Previous YearTax Yr 2017 Tax Yr 2016 Tax Yr 2015 Tax Yr 2014 Tax Yr 2013 FY18 - 8/3 Cert FY17 - N.W.E Effects FY16 FY15 FY14City - Gross % 13.4% 3.2% -1.4% 2.7% 3.1% Downtown TIF 22.8% 5.9% 6.6% 5.1% 8.0% Northeast TIF 15.8% -9.9% 12.5% 10.4% 14.9% Midtown TIF -5.5% -4.9% -13.9% 2.7% 10.1% Mandeville Farm TIF 11.5% 42.4% 5.4% -13.7% -21.6% South Bozeman Tech TIF - - - -City - Net % 13.3% 3.2% -1.5% 2.6% 2.9%Change12,555,045$ 2,881,964$ (1,293,525)$ 2,430,405$ 2,716,384$ Change in TIFs685,696 120,718 36,836 173,220 305,423 Change in Net11,869,349$ 2,761,246$ (1,330,363)$ 2,257,187$ 2,410,961$ TIF's combined growth as a % of Total Growth5.5% 4.2% -2.8% 7.1% 11.2% City Newly Taxable Property 3,393,650 3,279,600 4,563,975 2,642,222 1,462,894 % of prior year103% 72% 173% 181% 137%% Newly Taxable increase from prior year3.8% 3.8% 5.2% 3.1% 1.8%234
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