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HomeMy WebLinkAboutResolution No. 4393.pdf Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Finance Director Chris Kukulski, City Manager SUBJECT: Commission Resolution No. 4393 – Setting Mill Levies for Fiscal Year 2012-2013 (FY13). MEETING DATE: August 27, 2012 AGENDA ITEM: Action RECOMMENDATION: Adopt Commission Resolution No. 4393 – Setting Mill Levies for Fiscal Year 2012-2013 (FY13). BACKGROUND: The City’s certification of taxable values for FY13 puts the value of 1 mill levied on all taxable property in the city = $83,226. This is an increase of 1.4% over the certified value for last year ($82,062/mill.) 96 Under state law, the City’s maximum allowable mill levy for FY13 is calculated to be 197.88 mills. The proposed mill levy for this year is the same as last year: 166.75 mills. Levy Purpose Number of Mills All Purpose Levy 127.66 Community/Workforce Housing 0.50 Permissive Medical Insurance 23.22 Planning 2.00 Senior Transportation 1.00 Transportation GO Bonds 5.07 Library GO Bonds 3.30 Grand Total Levied 166.75 A levy of 166.75 mills is the same as last year, and is lower than the tax levies of FY11, FY10, and FY09. $83,226 $82,062 $80,399 $78,290 $74,178 $68,981 $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 FY13 FY12 FY11 FY10 FY09 FY08 Taxes Generated from 1 Mill City-Wide 97 During FY13 budget discussions, the Commission stated an interest in keeping property taxes at the same total mill levy for citizens. Just prior to final budget adoption, budget cuts were made reducing the Bogert Pool Design/Repair line item to $177,000, so that there would not be a total tax levy increase for citizens. Our certified value for budget purposes was estimated to increase 2.1% over last year. With the actual certification (1.4% increase) less than we estimated, and keeping the total mill levy the same, the budget impact will be $69,319 less in tax revenue to the General Fund. This amount represents 0.62% of the $10.6 million tax revenue in the General Fund. Rather than open the Approved Budget for other line-item cuts, we recommend that the Bogert Pool Design/Repair item be amended down to $107,000 to accommodate this revenue shortfall in the budget. This item can be prepared for a future (consent) agenda. Tax Increment Districts: One of the elements of our certified values that is difficult to gauge is now much of our construction will occur in the Tax Increment Districts and how much will be out of the districts, and therefore part of the city-wide mill levy. This year saw our Tax Increment District certified values increase from 6.5% in the Downtown TIF to 33.1% in the Mandeville Farm TIF. The Districts’ combined growth has peaked this year to encompass approximately 27% of the city’s gross increase in taxable property. New taxable 154.18 171.16 170.19 168.75 166.75 166.75 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 FY08 FY09 FY10 FY11 FY12 FY13 FINAL City Property Tax Mill Levy 98 value is increasing at a faster rate in our Increment Districts than in the city as a whole, outside the districts. Taxable Values FY13 City - Gross Dollars of Taxable Value $ 86,934,533 Less: Downtown TIF Taxable Value 2,396,293 Less: Northeast TIF Taxable Value 150,217 Less: North 7th TIF Taxable Value 1,084,216 Less: Mandeville Farm TIF Taxable Value 77,412 Less: Total of TIF's Taxable Value 3,708,138 City - Net Dollars of Taxable Value $ 83,226,395 Change in Taxable Value from Previous Year FY13 City - Gross % 1.9% Downtown TIF 6.4% Northeast TIF 12.8% North 7th TIF 29.1% Mandeville Farm TIF 33.1% City - Net % 1.4% TIF's combined growth as a % of Total Growth 26.8% Difference between Statutory Maximum and amount levied this year: The city’s FY13 tax levy is 31.13 mills ($2,590,889) below the statutory maximum. 1. There is a reduction to the maximum levy of 15.18 mills ($1,263,330) as a result of General Fund budget requests being cut and a desire to not levy the maximum number of mills. 2. In November 2007, city voters approved increasing our tax levies to fund police department officers and their equipment. However, due to unspent Police personnel budget in FY12, and the plan to only hire one Battalion Chief in April 2013, we are recommending lowering the Police & Fire Levy amounts this year by $578,525, or 6.95 mills. 99 3. In September 2006, the Commission resolved to lower the City’s levy by 9 mills if the county-wide levy for 911 Dispatch services was approved by the voters. The county- wide levy was approved, 911 Dispatch is no longer paid for out of the City’s General Fund, and the FY2011-2012 City All Purpose levy has been lowered 9 mills ($749,034), again this year. Again, the attached resolution anticipates levying 166.75 mills; no increase in mills from the prior year. FY13 Maximum Levy in Mills 197.88 General Fund Cuts (15.18) Police & Fire Vacancy Savings (6.95) County 911 (9.00) FY13 Proposed Levy in Mills 166.75 FY12 Levy in Mills 166.75 Difference between FY11 & FY12 in Mills ( - ) Dollar value of 2.16 Mills ($ - ) Department of Revenue: This year City and County officials met local Department of Revenue officials before the certification deadline to discuss property assessment issues. The city was also again able to analyze the DOR’s data set for taxable values and protests/appeals. Protests/Appeals: 81 properties were given a case number for a 2012 Valuation Appeal, down from a high of 1262 cases in tax year 2009 (FY10). Of those cases, 10 remain active and 71 are closed. Twenty-two (22) resulted in Value Adjustments, with the remainder either denied/no- change/withdrawn. The two largest property values that were appealed were the Days Inn (located in the N7th TIF) and Kohl’s. Both of these appeal cases are closed, with Days Inn seeing no change due to untimely filing, and Kohl’s being granted a value adjustment. Tax Year Property Value Appeal Cases Cases Closed To Date 2012 81 71 2011 98 98 2010 334 334 2009 1262 1262 100 The City’s GIS Department has again pulled the complete DOR data set for us and matched City building permit data with DOR assessment information. There doesn’t appear to be systematic problems with new construction. We are sharing our recent aerial photography layer with the Department and will continue to coordinate our efforts to ensure their annual property tax records are complete. The data set indicates a new median residential property taxable market value of $141,000, up from $133,400 last year. We will use this new figure in the FY14 budget preparation information. FISCAL EFFECTS: Adopting a mill levy of 166.75 mills is estimated to generate $13,878,293 in property tax revenue for FY13. The revenue will be deposited to the funds described on the attached “Mill Levies & Mill Values” sheet. The effect of this levy on city property owners is to hold property tax rates at the same level as last year. A typical resident (median home assessed market value of $133,380) will pay $627 in annual property taxes to the city. ALTERNATIVES: As suggested by the City Commission. Attachment: Commission Resolution No. 4393 FY13 Mill Levies and Mill Values Bozeman Taxable Values History Department of Revenue Certified Value Report compiled on August 15, 2012 101 FISCAL YEAR FY08 FY09 FY10 FY11 FY12 FY13 FINAL MILL VALUE (net of TIFD's) 68,981$ 74,178$ 78,290$ 80,399$ 82,062$ 83,226$ *Corrected 9/2011 Issued 9/2011 PERCENTAGE CHANGE 9.1% 7.5% 5.5% 2.7% 2.1% 1.4% GENERAL FUND: All-Purpose 101.26 111.91 111.96 110.16 127.16 127.66 SPECIAL REVENUE: City Planning 2.00 2.00 2.00 2.00 2.00 2.00 Police Retirement* 4.27 4.14 4.34 4.45 0.00 0.00 Firefighters' Retirement* 2.81 2.72 2.85 2.97 0.00 0.00 Public Employees' Retirement* 4.61 4.52 4.75 4.86 0.00 0.00 Comprehensive Insurance* 4.67 4.53 4.61 4.73 0.00 0.00 Health/Med Insurance 22.36 24.31 23.67 24.29 22.53 23.22 Fire Capital & Equipment 4.00 4.00 4.00 4.00 4.00 Fire Truck/Equipment Senior Transportation 1.00 1.00 1.00 1.00 1.00 1.00 Workforce Housing 1.46 1.00 0.50 0.50 0.50 TOTAL SPECIAL REVENUE 41.72 48.68 48.22 48.80 30.03 30.72 DEBT SERVICE:*Refunded Library G.O. Bonds 4.53 4.27 4.03 3.94 3.84 3.30 Transportation G.O. Bonds 6.67 6.30 5.98 5.85 5.72 5.07 TOTAL DEBT SERVICE 11.20 10.57 10.01 9.79 9.56 8.37 TOTAL ALL LEVIES 154.18 171.16 170.19 168.75 166.75 166.75 Percentage Change in Mills -5.7% 11.0% -0.6% -0.8% -1.2% 0.0% Property Taxes Levied $10,635,491 $12,696,306 $13,324,175 $13,567,611 $13,683,839 $13,878,293 Percentage Change in Dollars 2.9% 19.4% 4.9% 1.8% 0.9% 1.4% * These funds are being combined into the All Purpose Levy. They are all subject to MCA 15-10-420. Tax Authority Authorized but Not Levied General Fund Reduction 462,720$ 684,976$ 1,263,330$ Street & Tree Maintenance Offset 116,270$ -$ -$ Police & Fire Reductions 583,000$ 849,000$ 914,000$ 578,525$ SAFER Grant 350,120$ 303,570$ 189,720$ 113,985$ -$ 911 Mills (Resolution No. 3954) 620,829 667,602$ 704,610$ 723,303$ 738,558$ 749,034$ FY11 Certification Error:59,753$ Total Authorized But Not Levied 620,829$ 1,017,722$ 1,591,180$ 2,400,766$ 2,451,519$ 2,590,889$ Number of Mills - 9.00 13.72 20.32 29.87 31.13 MILL LEVIES & MILL VALUES Final Certification of Values 102 City of BozemanTaxable Values HistoryTax Yr 2012 Tax Yr 2011 Tax Yr 2010 Tax Yr 2009 Tax Yr 2008 Tax Yr 2007FY13 FY12 FY11 FY10 FY09 FY08City - Gross Dollars of Taxable Value $ 86,934,533 $ 85,345,227 $ 83,309,165 $ 80,850,582 $ 75,458,468 $ 70,016,605 Less: Downtown TIF Taxable Value 2,396,293 2,251,286 2,060,807 1,947,249 1,115,768 931,030 Less: Northeast TIF Taxable Value 150,217 133,197 135,162 104,987 71,287 48,790 Less: North 7th TIF Taxable Value 1,084,216 840,137 664,127 450,625 93,316 55,532 Less: Mandeville Farm TIF Taxable Value 77,412 58,146 50,554 57,740 - - Less: Total of TIF's Taxable Value 3,708,138 3,282,766 2,910,650 2,560,601 1,280,371 1,035,352 City - Net Dollars of Taxable Value $ 83,226,395 $ 82,062,461 $ 80,398,515 $ 78,289,981 $ 74,178,097 $ 68,981,253 Tax Dollars Generated from 1 Mill: $ 83,226 $ 82,062 $ 80,399 $ 78,290 $ 74,178 $ 68,981 Change in Taxable Value from Previous Year Tax Yr 2012 Tax Yr 2011 Tax Yr 2010 Tax Yr 2009 Tax Yr 2008 Tax Yr 2007 FY13 FY12 FY11 FY10 FY09 FY08City - Gross % 1.9% 2.4% 3.0% 7.1% 7.8% - Downtown TIF 6.4% 9.2% 5.8% 74.5% 19.8% - Northeast TIF 12.8% -1.5% 28.7% 47.3% 46.1% - North 7th TIF 29.1% 26.5% 47.4% 382.9% 68.0% - Mandeville Farm TIF 33.1% 15.0% -12.4% - - - City - Net % 1.4% 2.1% 2.7% 5.5% 7.5% - TIF's combined growth as a % of Total Growth 26.8% 18.3% 14.2% 23.7% 4.5%103 104 1 of 4 COMMISSION RESOLUTION NO. 4393 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 2012-2013 (FY13). WHEREAS, in accordance with 15-10-203 MCA, after due and proper legal notice, at a regular session of the City Commission on August 27, 2012, 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 2012 Certified Taxable Valuation on August 3, 2012; 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: That for the purpose of providing and maintaining basic City services the City Commission of the City of Bozeman, Montana does hereby affix 127.66 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 1 Section 2 105 Resolution No. 4393, Establishing and Affixing the Number of Mills 2 of 4 That the City Commission of the City of Bozeman, Montana does hereby affix a 0.50 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. That the City Commission of the City of Bozeman, Montana does hereby establish and affix a mill levy in the amount of 23.22 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 3 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 4 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 5 That the City Commission of the City of Bozeman, Montana does hereby establish and affix a mill levy in the amount of 5.07 mills to provide for principal and interest payments on outstanding Transportation System General Obligation Bonds in accordance with Section 7-7- 4265 MCA. Section 6 That the City Commission of the City of Bozeman, Montana does hereby establish and affix a mill levy in the amount of 3.30 mills to provide for principal and interest payments on outstanding Library General Obligation Bonds in accordance with Section 7-7-4265 MCA. Section 7 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 8 PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana at a regular session thereof held on the 27th day of August 2012. 106 Resolution No. 4393, Establishing and Affixing the Number of Mills 3 of 4 __________________________________ SEAN BECKER Mayor ATTEST: _____________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 107 Resolution No. 4393, Establishing and Affixing the Number of Mills 4 of 4 CITY OF BOZEMAN Mill Levy Fiscal Year 2012-2013 (FY13) Levy Purpose Number of Mills All Purpose Levy 127.66 Community Housing 0.50 Permissive Medical Insurance 23.22 Planning 2.00 Senior Transportation 1.00 Transportation GO Bonds 5.07 Library GO Bonds 3.30 Fire Capital & Equipment 4.00 TOTAL LEVY 166.75 mills 108