HomeMy WebLinkAbout09-09-19 City Commission Packet Materials - A4. Res 5068, Establishing Mill Levies for FY2019-2020
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Kristin Donald, Finance Director
SUBJECT: Commission Resolution No. 5068 – Setting Mill Levies for Fiscal Year
2019-2020 (FY20).
MEETING DATE: September 9, 2019
AGENDA ITEM: Action
RECOMMENDATION: Adopt Commission Resolution No. 5068 – Setting Mill Levies for
Fiscal Year 2019-2020 (FY20).
BACKGROUND - Approved Budget: On June 24, 2019, the FY20 Budget was approved
with an anticipated a 4% increase in taxable value. It was developed with a mill value estimated
= $108,490 and an estimated maximum tax levy of 218.90 mills, of which 9 mills for Resolution
No. 3954 (911 mills) and 0.75 mills in the General Fund were to remain unlevied. The 911 mill
levy reduction is a commitment under Resolution No. 3954, related to the county-wide 911 mill
levy. 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.
517
CERTIFIED VALUES & MAXIMUM MILL LEVY: On August 5, 2019, the City received
its official certification of taxable values for FY20, issued by the Department of Revenue (DOR.).
The certification showed that the market value of the median home went up by 21% from $292,000
in FY19 to $354,000 in FY20. The certification also showed an increase of X% from new
construction (newly taxable property).
The FY20 certification puts the value of 1 mill levied on all taxable property in the city = $125,423;
this is an increase of 20.2% from last year’s certified value. The certification puts the City’s
maximum tax levy for FY20 at 197.45 mills.
Adopted Budget Estimated
Mill Levy
Mills Levied 209.15
Mills Unlevied
General fund mills 0.75
911 mill levy 9.00
Total unlevied 9.75
Maximum Mill levy 218.9
City of Bozeman Values
2019 2018 2017 2016
Special Mobile 37,515 43,869 47,146 51,622
Manufactured Homes 166,069 112,767 111,394 107,396
Business Equipment 1,412,528 1,242,232 1,169,173 1,195,611
Real Property (Residential & Commercial)124,109,850 100,692,212 97,508,338 85,144,231
Centrally Assessed 7,856,074 7,622,702 7,388,755 7,603,901
Net & Gross Proceeds - - - -
TIFD (8,158,839) (5,392,366) (5,030,031) (4,333,919)
Taxable Valaue 125,423,197 104,321,416 101,194,775 89,768,842
518
LEVY DETAILS: By law, the permissive medical insurance levy and debt service bond levies
increase to recover specific payment amounts. With the taxable value increase, the number of
mills levied have decreased.
In order to meet the approved budget, the City could levy 185.91 mills and generate $23,317,322
in property tax revenue,. This would leave us 11.54 mills under our tax cap; 9 mills for 911, and
2.54 mills related to the General Fund.
$125,423
$104,321 $101,195
$89,325 $86,564
$50,000
$70,000
$90,000
$110,000
$130,000
FY20FY19FY18FY17FY16
Taxes Generated from 1 Mill City-Wide
20.2%
3.1%
13.3%
3.2%
-1.5%-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
FY20FY19FY18FY17FY16
Change in Taxable Value from Previous Year
Keeping to Adopted
Budget based on dollars $
Mills Levied 185.91
Mills Unlevied
General fund mills 2.54
911 mill levy 9.00
Total unlevied 11.54
Maximum Mill levy 197.45
519
RECOMMENDATION: We recommend that the Commission consider levying property taxes
at a level that leaves the same number of mills “unlevied” as was planned in the budget; 9.75
mills. Based on the new taxable value, this would generate an additional$224,507 in revenue for
the General Fund. This would leave us 9.75 mills under our cap; 9 mills for Resolution No.
3954 (911 mills) and 0.75 mills in the General Fund would remain unlevied
Levy Purpose Number of Mills
All Purpose Levy 123.00
Community/Workforce Housing 5.00
Permissive Medical Insurance 22.45
Planning 2.00
Senior Transportation 1.00
Fire Equipment 4.00
Stormwater Project – Landfill Loan 0.60
Monitoring – Landfill 2.23
Library GO Bonds 2.18
Park and Trail GO Bonds 8.59
BPSC Bonds 14.86
Grand Total Levied 185.91
Recommendation
Mills Levied 187.70
Mills Unlevied
General fund mills 0.75
911 mill levy 9.00
Total unlevied 9.75
Maximum Mill levy 197.45
520
We recommend appropriating the additional revenue via the budget amendment action item
Resolution 5069.This additional funding is needed for the following:
• Bogert Pavilion repair, the Commission appropriated $200,000 in the adopted budget for
repairs. On July 15, 2019, the Commission reviewed the repair options for Bogert Pavilion.
The option preferred the Option 3, which is estimated to be $650,000. We have a shortfall
of approximately $450,000 for completion of the project, with insurance reimbursement
still pending.
• $14 hour wage - We have made progress towards the $14 hour minimum wage and market
there is a need for additional dollars of $15,000 to reach our goals throughout our
organization.
The recommended levy of 187.70 mills is lower than the maximum levy amount by 9.75 mills;
and yields $224,507 more than was estimated in the Approved Budget.
Levy Purpose Number of Mills
All Purpose Levy 124.79
Community/Workforce Housing 5.00
Permissive Medical Insurance 22.45
Planning 2.00
Senior Transportation 1.00
Fire Equipment 4.00
Stormwater Project – Landfill Loan 0.60
Monitoring – Landfill 2.23
Library GO Bonds 2.18
Park and Trail GO Bonds 8.59
BPSC Bonds 14.86
Grand Total Levied 187.70
Recommendation
521
The full details of prior years’ mill levies can be seen on the attachment to this memo labeled “Mill
Levies & Mill Values.”
Assessed Market Value Based on Budget $ =185.91 mills Recommended = 187.70 mills
$200,000 $506 $511
Median Home ~$354,000 $895 $904
$400,000 $1,011 $1,021
Tonight’s hearing has been advertised so that the Commission may adopt a levy up to the
maximum levy – or adopt a lower amount.
GENRAL FUND BALANCE: 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. At this point in time we are on track to meet but not exceed by a
material amount our carryover projections. In the recommended budget in Appendix D, staff
performed a risk- based analysis in line with Government Finance Officers Association’s revised
best practice for Fund Balance. The recommendation would increase the General Fund’s balance
to 17% of the budgeted expenditures. To do this, the recommendation is to not reduce the levy or
increase appropriation with any remaining cash carryover over and let it remain in fund balance.
188.76
210.16 205.30
187.33 191.24 187.70
23.85
13.19 16.88
17.97 15.89
9.75
FY15 FY16 FY17 FY18 FY19 FY20
Total Levied Number of Mills Not Levied
522
TAX INCREMENT FINANCING 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 the North Park District, no change (and no increment) in
the South Technology District, and significant growth in the Downtown, Northeast, and Midtown
Districts.
43.9%99.6%74.5%0.0%100.0%10.3%2.4%3.6%-100.0%100.0%22.8%15.8%-5.5%11.5%5.9%-9.9%-4.9%42.4%6.6%12.5%-13.9%5.4%-150.0%
-100.0%
-50.0%
0.0%
50.0%
100.0%
150.0%
DOWNTOWN
TIF
NORTHEAST TIF MIDTOWN TIF MANDEVILLE
FARM TIF
NORTH PARK
URBAN TIF
FY20
FY19
FY18
FY17
FY16
523
1,328,695 1,328,695
2,898,551
5,987,410
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
FY16 FY17 FY18 FY19 FY20
Downtown TIF Incremental
Taxable Value
Base Value Increamental Value
423,054 423,054
214,470
457,274
-
200,000
400,000
600,000
800,000
1,000,000
FY16 FY17 FY18 FY19 FY20
Northeast TIF Incremental
Taxable Value
Base Value Increamental Value
2,886,997 3,507,723
1,055,385
1,714,155
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
FY16 FY17 FY18 FY19 FY20
Midtown TIF Incremental
Taxable Value
Base Value Increamental Value
244,332 244,332
20,749
0
230,000
235,000
240,000
245,000
250,000
255,000
260,000
265,000
270,000
FY19 FY20
North Park Urban TIF
Incremental Taxable Value
Base Value Increamental Value
417 417
-
50
100
150
200
250
300
350
400
450
FY16 FY17 FY18 FY19 FY20
South Bozeman Tech TIF
Incremental Taxable Value
Base Value Increamental Value
524
FISCAL EFFECTS: Adopting the recommended mill levy of 187.70 mills is estimated to
generate $23,541,830 in property tax revenue for FY20. The revenue will be deposited to the
funds described on the attached “Recommended FY20 Mill Levies & Mill Values” sheet.
Based on DOR the updated information a typical resident would pay an annual property tax of
$903.66 to the City for Tax Year 2019. Information from the DOR indicates that the number is
$4.81 /mill for a median home. The effect of this levy on the typical residential property owner is
a $140.07 ($71.48 BPSC levy and $68.59 all other levies) increase.
Keeping to Adopted Budget
based on dollars $Recommendation
Mills Levied 185.91 187.70
Revenue Generated 23,317,322$ 23,541,830$
Mills Unlevied
General fund mills 2.54 0.75
911 mill levy 9.00 9.00
Total unlevied 11.54 9.75
Maximum Mill levy 197.45 197.45
Levy/Assessment FY19 Approved
FY20
Recommended
FY20
Recommended
increase % Change
Street Assessment 207.92 224.55 16.63 8%
Arterial Street Assessment 51.78 51.78 - 0%
Tree (Forestry ) Assessment 23.61 24.05 0.44 2%
Property Taxes (W/O BPSC)763.60 832.19 68.59 9%
BPSC Property Tax 0.00 71.48 71.48 100%
Storm Water Services 70.92 73.76 2.84 4%
Water Service 542.05 555.81 13.76 3%
Sewer Services 630.99 630.99 0.00 0%
173.74
14.48
Total Annual Estimated Increase
Monthly Increase
525
ALTERNATIVES: As suggested by the City Commission.
Attachment: Commission Resolution No. 5068 Recommended FY20 Mill Levies and Mill Values
Bozeman Taxable Values History
Department of Revenue Certified Value Tax Year 2019
Report compiled on August 28, 2019
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Page 1 of 5
RESOLUTION NO. 5068
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 2019-2020 (FY20).
WHEREAS, in accordance with 15-10-203 MCA, after due and proper legal notice, at a
regular session of the City Commission on September 9, 2019, 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 5, 2019; 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 124.79 mills to be levied for the All Purpose
527
Resolution No. 5068, Establishing and Affixing the Number of Mills for FY20
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 5.00 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 22.45 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 0.60 mill
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Resolution No. 5068, Establishing and Affixing the Number of Mills for FY20
Page 3 of 5
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 2.18 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 8.59 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 2.23 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.
529
Resolution No. 5068, Establishing and Affixing the Number of Mills for FY20
Page 4 of 5
Section 11
That the City Commission of the City of Bozeman, Montana does hereby establish and
affix a mill levy in the amount of 14.86 mills to provide for principal and interest payments on
outstanding Bozeman Public Safety Center (BPSC) General Obligation Bonds in accordance with
Section 7-7-4265 MCA.
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana at a regular session thereof held on the 9th day of September, 2019.
__________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
__________________________________ ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN
City Attorney
530
Resolution No. 5068, Establishing and Affixing the Number of Mills for FY20
Page 5 of 5
CITY OF BOZEMAN
Levy Purpose Number of Mills
All Purpose Levy 124.79
Community/Workforce Housing 5.00
Permissive Medical Insurance 22.45
Planning 2.00
Senior Transportation 1.00
Fire Equipment 4.00
Stormwater Project – Landfill Loan 0.60
Monitoring – Landfill 2.23
Library GO Bonds 2.18
Park and Trail GO Bonds 8.59
BPSC Bonds 14.86
Grand Total Levied 187.70
Mill Levy Fiscal Year 2019-2020 (FY20)
531
FISCAL YEAR FY15 FY16 FY17 FY18 FY19 FY20
MILL VALUE (net of TIFD's) 87,894$ 86,564$ 89,325$ 101,195$ 104,321$ 125,423$
PERCENTAGE CHANGE 2.6% ‐1.5% 3.2% 13.3% 3.1% 20.2%
GENERAL FUND:
All‐Purpose 144.77 155.78 148.21 134.39 139.69 124.79
SPECIAL REVENUE:
City Planning 2.00 2.00 2.00 2.00 2.00 2.00
Health/Med Insurance 23.18 27.11 26.40 24.48 25.44 22.45
Fire Capital & Equipment 4.00 4.00 4.00 4.00 4.00 4.00
Transfer to Stormwater ‐ Landfill Project 1.57 1.62 1.56 1.38 0.71 0.60
Transfer to Landfill Closure ‐ Monitring ‐ ‐ 4.00 3.67 2.38 2.23
Senior Transportation 1.00 1.00 1.00 1.00 1.00 1.00
Workforce Housing 1.00 3.00 3.00 3.00 3.00 5.00
TOTAL SPECIAL REVENUE 32.75 38.72 41.96 39.53 38.53 37.28
DEBT SERVICE:
BPSC GO Bonds ‐ ‐ ‐ ‐ ‐ 14.86
Park & Trail G.O.Bonds 8.13 12.49 12.06 10.68 10.38 8.59
Library G.O. Bonds 3.11 3.16 3.07 2.73 2.64 2.18
TOTAL DEBT SERVICE 11.24 15.65 15.13 13.41 13.02 25.63
Total Levied 188.76 210.16 205.30 187.33 191.24 187.70
Percentage Change in Mills 9.4% 12.4% ‐2.6% ‐8.6% 1.9% ‐1.9%
Property Taxes Levied 16,590,871$ 18,191,892$ 18,338,501$ 18,956,859$ 19,950,675$ 23,541,830$
Percentage Change in Dollars 11.9% 9.7% 0.8% 3.4% 5.2% 18.0%
* These funds are being combined into the All Purpose Levy. They are all subject to MCA 15‐10‐420.18%
General Fund Reduction 1,271,667$ 363,096$ 703,800$ 907,719$ 718,772$ 94,015$
911 Mills (Resolution No. 3954) 770,733$ 779,076$ 803,925$ 910,755$ 938,889$ 1,128,809$
Total Authorized But Not Levied 2,042,400$ 1,142,172$ 1,507,725$ 1,818,474$ 1,657,661$ 1,222,824$
Number of Mills Not Levied 23.85 13.19 16.88 17.97 15.89 9.75
Maximum Levy Allowed 212.61 223.35 222.18 205.30 207.13 197.45
MILL LEVIES & MILL VALUES
Tax Authority Authorized but Not Levied
532
Bozeman Taxable Values HistoryTax Yr 2019 Tax Yr 2018Tax Yr 2017 Tax Yr 2016 Tax Yr 2015FY20 FY19FY18 FY17 FY16Total Market Value $ 8,596,253,775 $ 6,981,943,409 $ 6,745,351,312 $ 5,870,738,906 $ 5,698,588,679 Change in Total Market Value 23.1% 3.5% 14.9% 3.0% 58.4%City - Gross Dollars of Taxable Value 133,582,036 109,713,782 106,224,806 93,669,761 90,787,797 Less: Downtown TIF Taxable Value 5,987,410 4,159,996 3,769,917 3,068,902 2,898,551 Less: Northeast TIF Taxable Value 457,274 229,047 223,765 193,281 214,470 Less: Midtown TIF Taxable Value 1,714,155 982,574 948,716 1,003,546 1,055,385 Less: Mandeville Farm TIF Taxable Value - - 87,633 78,606 55,211 Less: North Park Urban TIF Taxable Value - 20,749 - - - Less: South Bozeman Tech TIF Taxable Value - - - - - Less: Total of TIF's Taxable Value 8,158,839 5,392,366 5,030,031 4,344,335 4,223,617 City - Net Dollars of Taxable Value $ 125,423,197 $ 104,321,416 $ 101,194,775 $ 89,325,426 $ 86,564,180 Tax Dollars Generated from 1 Mill: $ 125,423 $ 104,321 $ 101,195 $ 89,325 $ 86,564 Change in Taxable Value from Previous YearTax Yr 2019 Tax Yr 2018Tax Yr 2017 Tax Yr 2016 Tax Yr 2015 FY20 FY19FY18 FY17 FY16City - Gross %21.8% 3.3% 13.4% 3.2% -1.4% Downtown TIF43.9% 10.3%22.8% 5.9% 6.6% Northeast TIF99.6% 2.4%15.8% -9.9% 12.5% Midtown TIF74.5% 3.6%-5.5% -4.9% -13.9% Mandeville Farm TIF0.0% -100.0%11.5% 42.4% 5.4%North Park Urban TIF100.0% 100.0% South Bozeman Tech TIF-----City - Net %20.2% 3.1% 13.3% 3.2% -1.5%Change23,868,254$ 3,488,976$ 12,555,045$ 2,881,964$ (1,293,525)$ Change in TIFs2,766,473 362,335 685,696 120,718 36,836 Change in Net21,101,781$ 3,126,641$ 11,869,349$ 2,761,246$ (1,330,363)$ TIF's combined growth as a % of Total Growth11.6% 10.4%5.5% 4.2% -2.8% City Newly Taxable Property 4,685,485 3,707,744 3,393,650 3,279,600 4,563,975 % of prior year126% 109%103% 72% 173%% Newly Taxable increase from prior year4.5% 3.7%3.8% 3.8% 5.2%533
2019 Certified Taxable Valuation Information
(15-10-202, MCA)
Gallatin County
CITY OF BOZEMAN
MONTANA
Form AB-72T
Rev. 3-12
Certified values are now available online at property.mt.gov/cov
1. 2019 Total Market Value1................................................................................................. $ 8,596,253,775 -------'---'-----"---2. 2019 Total Taxable Value2................................................................................................. $ 133,582,036 ---------3. 2019 Taxable Value of Newly Taxable Property............................................................ $ 4,685,485 ---------4. 2019 Taxable Value less Incremental Taxable Value3 ................................................... $ 125,423,197 ------'-----'---5.2019 Taxable Value of Net and Gross Proceeds4
(Class 1 and Class 2)............................................................................................. $ ---------6.TIF Districts
Tax Increment Current Taxable Base Taxable Incremental
Value District Name Value2 Value
BOZEMAN DOWNTOWN 7,316,105 1,328,695 5,987,410
NORTHEAST URBAN REN 880,328 423,054 457,274
BOZEMAN MIDTOWN UI 5,221,878 3,507,723 1,714,155
NORTH PARK URBAN REI 242,439 244,332 -I\
SOUTH BOZEMAN TECHI 327 417 -I\
I\ Increment based on the percentage of overall increment for the TIFD
Total Incremental Value $ 8,158,839 ---------
Preparer Pam Moor Date 8/5/2019
1Market value does not include class 1 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
4rhe taxable value of class 1 and class 2 is included in the taxable value totals
For Information Purposes Only
2019 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.
I.Value Included in "newly taxable" property $
II.Total value exclusive of "newly taxable" property $ 37,713
534
535