FIN 2017-11-07 Item 2C - Ordinances - 2018 Tax Levy Legislation

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TO: FROM: BY: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Finance Committee Peggy McCarthy, Finance Director Vicky Carlsen, Deputy Finance Director CC: Mayor Ekberg DATE: November 1, 2017 SUBJECT: 2018 Property Tax Levy ISSUE Approval of ordinances increasing the regular levy from the previous year and adopting the general and excess property tax levies for 2018 by November 30, 2017. BACKGROUND A Public Hearing for adoption of the 2018 property tax levy is required by RCW 84.55.120. The Hearing is scheduled for November 13, 2017. The City was notified on October 24, 2017 that the assessed value for Tukwila for 2018 is projected to be $6,044,327,455. The ordinance to set the general tax levy also includes the excess levy related to the Public Safety Plan that voters approved on the November 8, 2016 general election. The City sold $36.5 million of bonds in 2016 and debt service repayment began in 2017. The excess levy will be assessed for as long as the bonds are outstanding; the final payment is schedule for December 2036. The total excess levy requirement for 2018 is $2,800,000 with an approximate levy rate of $0.47 per thousand. The budget adopted by Council for the 2017-2018 biennium is based, in part, on a property tax revenue increase of 1% plus new construction. DISCUSSION Levy Amount The assessed value and the allowable levy are subject to change until final levy rate determination. A levy amount of $15,300,000 will be used for the ordinance. If the final allowable levy is less than the ordinance amount, King County Department of Assessments will adjust the ordinance amount to the final allowable levy amount and no further action by the Council will be required. Also included in the tax levy ordinance is an excess levy in the amount of $2,800,000 for debt service related to the unlimited tax obligation bonds that were sold at the end of 2016. Total bonds issued was $36.5 million. 27