HomeMy WebLinkAbout09-10-18 City Commission Packet Materials - A1. Res. 4925, Tax Levy Resolution
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Kristin Donald, Finance Director
SUBJECT: Commission Resolution No. 4925 – Setting Mill Levies for Fiscal Year
2018-2019 (FY19).
MEETING DATE: September 10, 2018
AGENDA ITEM: Action
RECOMMENDATION: Adopt Commission Resolution No. 4925 – Setting Mill Levies for
Fiscal Year 2018-2019 (FY19).
BACKGROUND: On April 16, 2018, the City adopted its first Strategic Plan. This
accomplishment significantly informs the FY19 budget. Following the Strategic Plan and the seven
priorities, adopted by the Commission, the FY19 Budget was approved with an anticipated a 4%
increase in taxable value. It was developed with a mill value estimated = $105,244 and an
estimated maximum tax levy of 191.24 mills.
CERTIFIED VALUES & MAXIMUM MILL LEVY: On August 2, 2018, the City received its
official certification of taxable values for FY19, issued by the Department of Revenue (DOR.)
We had questions for the Department about the changes in tax increment district values and newly
taxable property values. On August 7, 2018, and August 8, 2018, we received a corrected
232
certification of taxable values for FY19 from the DOR. In that process, it was also stated that an
error had occurred in the valuation of The Midtown TIF District. On August 13, 2018, the DOR
emailed the corrected certification. We have used this corrected information to calculate the City’s
maximum authorized mill levy.
The FY19 certification puts the value of 1 mill levied on all taxable property in the city = $104,321;
this is an increase of 3.1% from last year’s certified value. The certification puts the City’s
maximum tax levy for FY19 at 207.13 mills.
CURRENT BUDGET EFFECTS: With the certified value lower than we projected, the City will
generate $128,934 less in revenue for the General Fund, than what was estimated for the budget.
The permissive levy and debt service levies by law are increased to recover payment amounts.
Because we are below the maximum mill levy amount the Commission could decide tonight to
increase the mills to a level that will recover the amount of the General fund revenue that was
estimated in the budget. This would require 1.23 increase in the millage. We have not made that
recommendation tonight because $128,934 is 0.40% of total General fund revenues; we believe
that it is highly likely that other General fund revenues will be able to compensate for this relatively
small decrease.
In the past, the Commission has asked the Finance Department to estimate cash carry over from
the prior fiscal year so that the Commission could apply unexpected cash to decrease the tax levy.
This year, we are not finding cash carry over that exceeds our original budget estimates, in fact at
this time, without books fully closed and audited, we believe our cash carry over estimate is
approximately $165,000 lower than expected. With a total General fund cash reserve of
$7.5million, we believe this is not cause for budget changes at this point. However, declining cash
carryovers in future years will affect budget development and future tax levies.
Tonight’s hearing has been advertised so that the Commission may make the maximum levy – or
an amount lower than our recommendation. The revenue generated from the levy will aid in our
efforts to accomplish Strategic Plan goals and Commission priorities.
233
LEVY DETAILS: Under state law, the City’s maximum allowable mill levy for FY19 is
calculated to be 207.13mills. The recommended mill levy for this year is: 191.24 mills. This
is 3.91 mills more than last year’s mill levy.
From FY19 Certified
Value
Levy Purpose Number of Mills
All Purpose Levy 139.69
Community/Workforce Housing 3.00
Permissive Medical Insurance 25.44
Planning 2.00
Senior Transportation 1.00
Fire Equipment 4.00
Stormwater Project – Landfill Loan 0.71
Monitoring – Landfill 2.38
Library GO Bonds 2.64
Park and Trail GO Bonds 10.38
Grand Total Levied 191.24
Amounts recommended not levied total: 15.89 mills.
From FY19 Certified
Value
Purpose Number of Mills
General Fund – All Purpose Levy, not levied 6.89
911 Mills (Resolution No. 3954) 9.00
Grand Total NOT Levied 15.89
A levy of 191.24 mills is lower than the maximum levy amount by 15.89 mills; and yields $128,934
less than was estimated in the Approved Budget.
234
The full details of prior years’ mill levies can be seen on the attachment to this memo labeled “Mill
Levies & Mill Values.”
Difference between Statutory Maximum and amount levied this year:
The City’s proposed levy is lower than the maximum allowable levy by 207.13 mills:
• 9 mills – commitment under Resolution No. 3954, related to the county-wide 911
mill levy, ($938,889.) 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.
• 6.89 mills – reduced during the FY19 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.
173.08 188.76 210.16 205.30 187.33 191.24
31.13 23.85 13.19 16.88
17.97 15.89
FY14 FY15 FY16 FY17 FY 18 FY19
Total Levied Number of Mills Not Levied
235
The attached resolution anticipates levying 191.24 mills.
FY19 Maximum Levy in Mills 207.13
General Fund Cuts (15.89)
County 911-Records (9.00)
FY19 Proposed Levy in Mills 191.24
FY18 Levy in Mills 187.33
Difference between FY18 & FY19 in Mills 3.91
Difference in Dollars (increased mill value, new
construction, etc.)
$408,099
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.
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 FY19
City - Gross Dollars of Taxable Value $109,713,782
Less: Downtown TIF Taxable Value 4,159,996
Less: Northeast TIF Taxable Value 229,047
Less: Midtown TIF Taxable Value 982,574
Less: North Park Urban TIF Taxable Value 20,749
Less: South Bozeman Tech TIF Taxable Value -
Less: Total of TIF's Taxable Value 5,392,366
City - Net Dollars of Taxable Value $104,321
236
Change in Taxable Value from Previous Year FY19
City - Gross % 3.3%
Downtown TIF 10.3%
Northeast TIF 2.4%
Midtown TIF 3.6%
North Park Urban Farm TIF 100%
South Bozeman Tech TIF -
City - Net % 3.1%
FISCAL EFFECTS: Adopting a mill levy of 191.24 mills is estimated to generate
$19,950,552 in property tax revenue for FY19. The revenue will be deposited to the funds
described on the attached “Mill Levies & Mill Values” sheet.
Based on DOR the updated information a typical resident would pay an annual property tax of
$748.13 to the City for Tax Year 2018. Information from the DOR indicates that the number is
$3.91/mill for a median home. The effect of this levy on the typical residential property owner is
a $15.30 increase.
FY18 Approved
FY19
Recommended
FY 19
Recommended
increase % Change
Street Assessment
198.02
207.92
9.90 5%
Arterial Street
Assessment
69.97
51.78
(18.19) -26%
Tree (Forestry )
Assessment
22.48
23.61
1.13 5%
Property Taxes
732.83
748.13
15.30 2%
Storm Water Services
70.92
70.92 - 0%
Water Service *10 month
billing
516.24
532.80
16.56 3%
Sewer Services *10 month
billing
606.72
624.48
17.76 3%
Total Annual Increase
$
42.46
Monthly Increase
$
3.54
237
ALTERNATIVES: As suggested by the City Commission.
Attachment: Commission Resolution No. 4925
FY19 Mill Levies and Mill Values
Bozeman Taxable Values History Corrected Department of Revenue Certified Value Tax Year 2018
Report compiled on August 31, 2018
238
Page 1 of 5
COMMISSION RESOLUTION NO. 4925
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 2018-2019 (FY19).
WHEREAS, in accordance with 15-10-203 MCA, after due and proper legal notice, at a
regular session of the City Commission on September 10, 2018, 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 2018 Certified
Taxable Valuation received on August 13, 2018; 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 139.69 mills to be levied for the All Purpose
239
Resolution 4925, Establishing and Affixing the Number of Mills for FY19
Page 2 of 5
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 25.44 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.
240
Resolution 4925, Establishing and Affixing the Number of Mills for FY19
Page 3 of 5
Section 6
That the City Commission of the City of Bozeman, Montana does hereby affix a 0.71
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 2.64 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 10.38 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 2.38
mill levy from the City’s maximum mill levy allowed under Sections 7-6-4451 and 15-10-420
241
Resolution 4925, Establishing and Affixing the Number of Mills for FY19
Page 4 of 5
MCA for the costs of Landfill Post-closure activities at the Story Mill Landfill.
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana at a regular session thereof held on the 10th day of September, 2018.
__________________________________
CYNTHIA L. ANDRUS
Mayor ATTEST:
___________________________________ ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN
City Attorney
242
Resolution 4925, Establishing and Affixing the Number of Mills for FY19
Page 5 of 5
CITY OF BOZEMAN
Mill Levy Fiscal Year 2018-2019 (FY19)
Levy Purpose Number of Mills
All Purpose Levy 139.69 Workforce/Community Housing 3.00
Permissive Medical Insurance 25.44
Planning 2.00
Senior Transportation 1.00
Trails, Open Space, & Parks GO Bonds 10.38 Library GO Bonds 2.64
Stormwater - Story Mill Landfill Project
Fire Capital & Equipment
Landfill Post-closure Activities
0.71
4.00
2.38
TOTAL LEVY 191.24 mills
243
FISCAL YEAR FY14 FY15 FY16 FY17 FY 18 FY19
MILL VALUE (net of TIFD's)85,637$ 87,894$ 86,564$ 89,325$ 101,195$ 104,321$
PERCENTAGE CHANGE 2.9%2.6% ‐1.5%3.2% 13.3%3.1%
GENERAL FUND:
All‐Purpose 134.76 144.77 155.78 148.21 134.39 139.69
SPECIAL REVENUE:
City Planning 2.00 2.00 2.00 2.00 2.00 2.00
Health/Med Insurance 22.57 23.18 27.11 26.40 24.48 25.44
Fire Capital & Equipment 4.00 4.00 4.00 4.00 4.00 4.00
Transfer to Stormwater ‐ Landfill Project 0.00 1.57 1.62 1.56 1.38 0.71
Transfer to Landfill Closure ‐ Monitring 0.00 0.00 0.00 4.00 3.67 2.38
Senior Transportation 1.00 1.00 1.00 1.00 1.00 1.00
Workforce Housing 0.50 1.00 3.00 3.00 3.00 3.00
TOTAL SPECIAL REVENUE 30.07 32.75 38.72 41.96 39.53 38.53
DEBT SERVICE:
Park & Trail G.O.Bonds 0.00 8.13 12.49 12.06 10.68 10.38
Library G.O. Bonds 3.06 3.11 3.16 3.07 2.73 2.64
Transportation G.O. Bonds 5.19 0.00 0.00 0.00 0.00 ‐
TOTAL DEBT SERVICE 8.25 11.24 15.65 15.13 13.41 13.02
Total Levied 173.08 188.76 210.16 205.30 187.33 191.24
Percentage Change in Mills 3.8%9.4% 12.4% ‐2.6% ‐8.6%1.9%
Property Taxes Levied 14,821,724$ 16,590,871$ 18,191,892$ 18,338,501$ 18,956,859$ 19,950,552$
Percentage Change in Dollars 6.8% 11.9%9.7%0.8%3.4%5.2%
* These funds are being combined into the All Purpose Levy. They are all subject to MCA 15‐10‐420.
General Fund Reduction 1,263,330$ 1,271,667$ 363,096$ 703,800$ 907,719$ 718,772$
Police & Fire Reductions 578,525$ ‐$ ‐$ ‐$ ‐$ ‐$
911 Mills (Resolution No. 3954)749,034$ 770,733$ 779,076$ 803,925$ 910,755$ 938,889$
Total Authorized But Not Levied 2,590,889$ 2,042,400$ 1,142,172$ 1,507,725$ 1,818,474$ 1,657,661$
Number of Mills Not Levied 31.13 23.85 13.19 16.88 17.97 15.89
MILL LEVIES & MILL VALUES
Tax Authority Authorized but Not Levied
FY19 Mill Levies and Mill Values
244
Bozeman Taxable Values HistoryTax Yr 2018Tax Yr 2017 Tax Yr 2016 Tax Yr 2015 Tax Yr 2014 Tax Yr 2013FY19FY18 FY17 - N.W.E Effects FY16 FY15 FY14Total Market Value $ 6,981,943,409 $ 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 3.5% 14.9% 3.0% 58.4% 6.3% 6.6%City - Gross Dollars of Taxable Value 109,713,782 106,224,806 93,669,761 90,787,797 $ 92,081,322 $ 89,650,917 Less: Downtown TIF Taxable Value 4,159,996 3,769,917 3,068,902 2,898,551 2,718,220 2,586,963 Less: Northeast TIF Taxable Value 229,047 223,765 193,281 214,470 190,579 172,608 Less: Midtown TIF Taxable Value 982,574 948,716 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: North Park Urban TIF Taxable Value 20,749 - - - - - Less: South Bozeman Tech TIF Taxable Value - - - - 2 Less: Total of TIF's Taxable Value 5,392,366 5,030,031 4,344,335 4,223,617 4,186,781 4,013,561 City - Net Dollars of Taxable Value $ 104,321,416 $ 101,194,775 $ 89,325,426 $ 86,564,180 $ 87,894,543 $ 85,637,356 Tax Dollars Generated from 1 Mill: $ 104,321 $ 101,195 $ 89,325 $ 86,564 $ 87,895 $ 85,637 Change in Taxable Value from Previous YearTax Yr 2018Tax Yr 2017 Tax Yr 2016 Tax Yr 2015 Tax Yr 2014 Tax Yr 2013 FY19FY18 FY17 - N.W.E Effects FY16 FY15 FY14City - Gross %3.3% 13.4% 3.2% -1.4% 2.7% 3.1% Downtown TIF10.3%22.8% 5.9% 6.6% 5.1% 8.0% Northeast TIF2.4%15.8% -9.9% 12.5% 10.4% 14.9% Midtown TIF3.6%-5.5% -4.9% -13.9% 2.7% 10.1% Mandeville Farm TIF-100.0%11.5% 42.4% 5.4% -13.7% -21.6%North Park Urban TIF100.0% South Bozeman Tech TIF-----City - Net %3.1% 13.3% 3.2% -1.5% 2.6% 2.9%Change3,488,976$ 12,555,045$ 2,881,964$ (1,293,525)$ 2,430,405$ 2,716,384$ Change in TIFs362,335 685,696 120,718 36,836 173,220 305,423 Change in Net3,126,641$ 11,869,349$ 2,761,246$ (1,330,363)$ 2,257,187$ 2,410,961$ TIF's combined growth as a % of Total Growth10.4%5.5% 4.2% -2.8% 7.1% 11.2% City Newly Taxable Property 3,707,744 3,393,650 3,279,600 4,563,975 2,642,222 1,462,894 % of prior year109%103% 72% 173% 181% 137%% Newly Taxable increase from prior year3.7%3.8% 3.8% 5.2% 3.1% 1.8%245
2018 Certified Taxable Valuation lnformation
(1s-10-202, MCA)
Gallatin County
CITY OF BOZEMAN
Certified values are now available online at property,mt.gov/cov
1. 2018 Total Market Value1... ..................................... S
2. 2018 Total Taxable Va1ue2.............
3. 2018 Taxable Value of Newly Taxable Property ................................ S
4. 2018 Taxable Value less lncremental Taxable Value3..
5. 2018 Taxable Value of Net and Gross Proceedsa
s
(Class 1 and Class 2)...............
6. TIF Districts
Tax lncrement Current Taxable Ease Taxable
Oistrict Name Valuez Value
s
MONTANA
Form AB-727
Rev. 3-12
6,98L,943,409
S tog,7t3,782
3,707,744
BOZEMAN DOWNTOWN 5,488,691 1,328,695 4,r59,996
229,047
BOZEMAN MIDTOWN UI 4,490,297 3,507,723 982,574
NORTH PARK URBAN REI 265,081 244,332 20,749
305 4!7
5,392,366
Preparer Pam Moor Date 8h/2078
For lnformation Purposes Only
2018 taxable value of centrally assessed property having a market value of S1 million or more, which has
transferred to a different ownership in compliance with 15-10-202(2), MCA.
l. Value lncluded in "newly taxable" property S
ll. Total value exclusive of "newly taxable" property
L04,32L,4L6
lncremental
Value
NORTHEAST URBAN REN 652,107 423,O54
SOUTH BOZEMAN TECHI
^ lncrement based on the percentage of overall increment for the TIFD
Total lncremental Value S
lMarket value does not include class 1 and class 2 value
2Taxable value is calculated after abatements have been applied
this value is the taxable value less total incremental value of all tax increment financing districts
the taxable value of class 1 and class 2 is included in the taxable value totals
s
246
2018 Certified Taxable Valuation lnformation
(15-1G202, MCA)
Gallatin County
BOZEMAN (ClW) PLANNING DISTRICT
Certified values are now available online at property.mt.tov/cov
Base Taxable
Value
6,981,943,409
s LO9,773,782
3,707,744
5 704,32L,4L6
s
lncremental
Value
2. 2018 Total Taxable Value2..
3. 2018 Taxable Value of Newly Taxable Property.............
4. 2018 Taxable Value less lncremental Taxable Va1ue3..........
5. 2018 Taxable Value of Net and Gross Proceedsa
(Class 1 and Class 2)..............
6. TIF Districts
Current Taxable
Value2
s
Tax lncrement
District Name
5,488,691 L,328,69s 4,t59,996
NORTHEAST URBAN REN 652,t0r 423,054 229,O47
EOZEMAN MIDTOWN UI 4,490,297 3,507,723 982,574
NORTH PARK URBAN REI 265,081 244,332
SOUTH BOZEMAN TECHl 305 477
^ lncrement based on the percentage of overall increment for the TIFD
Total lncremental Value S 5,392,366
Preparer Pam Moor Date 8/Ll20t8
lMarket value does not include class l and class 2 value
2Taxable value is calculated after abatements have been applied
3This value is the taxable value less total incremental value of all tax increment financing districts
the taxable value of class 1 and class 2 is included in the taxable value totals
For lnformation Purposes Only
2018 taxable value of centrally assessed property having a market value of $1 million or more, which has
transferred to a different ownership in compliance with 15-10-202(2), MCA.
l. Value lncluded in "newly taxable" property S
ll. Total value exclusive of "newly taxable" property s
MONTANA
Form AB-727
Rev. 3-12
BOZEMAN DOWNTOWN
20,149
247