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Home My WebLink AboutCOW 2008-11-10 Item 5C.2 - Ordinance - Increase Property Tax Levy by 1% for 2009AGENDA ITEM TITLE SPONSOR'S SUMMARY Fund Source: Comments: MTG. DATE 11/10/08 EXPENDITURE REQUIRED $N /A MTG. DATE 11/10/08 COUNCIL AGENDA SYNOPSIS Inztials ITEM No. Meeting Date 1 Prepared by Mayor's review 1 Coursed review r l TENI_INFORMATION _r CAS NUMBER 08-138 ORIGINAL AGENDA DAI'E: NOVEMBER 10, 2008 2009 Property Tax Ordinances 1) Setting the Regular Levy 2) Increasing the Regular Levy by 1.0 percent. CATEGORY Discussion Motion Resolution Ordinance Bid Award Public Hearing Other Mtg Date 11/10/08 Mg Date Mtg Date Mtg Date 12 /1 /08 Mtg Date Mtg Date 11/17/08 Mtg Date SPONSOR Council Mayor Adm Svcs DCD Finance Fire Legal Pd,R Police PTV Pursuant to State statute both proposed ordinances are required in order to receive property tax revenues in 2009. The deadline for submitting 2009 property tax levies to King County is November 30, 2008 REVIEWED BY COW Mtg. CA &P Cmte F&S Cmte Transportation Cmte Utilities Cmte Arts Comm Parks Comm. Planning Comm DATE: 10/28/08 RECOMMENDATIONS: SPONSOR /ADMIN. Adopt the two proposed property tax ordinances as presented COMMITTEE Unanimous Approval; Forward to Committee of the Whole COST 1!1111PA?t =1 F UN ®__SOURCE AMOUNT BUDGETED $N /A CORD OF COUNCIL APPROPRIATION REQUIRED $N /A ATTACHMENTS Informational Memorandum dated 10/28/08 Preliminary Levy Limit Worksheet 2009 Tax Roll, and staff notes Excel Spreadsheet Calculating the 2009 Proposed Property Tax Levy Proposed ordinances in draft form Minutes from the Finance Safety Committee meeting of 11/04/08 City Of Tukwlla 6200 Southcenter Boulevard Tukwila, Washington 98188 Jim Haggerton, Mayor Il\TFORMATIONAL MEMORANDUM To: Mayor Haggerton Finance Safety Committee From: Shawn Hunstock, Finance Director Date: October 28, 2008 Subject: 2009 Proposed Property Tax Levy In preparation for our discussion at the November 4, 2008 Finance Safety Committee meeting, I have attached a number of documents for your review related to establishing the 2009 property tax levy. Specifically, you will find a 2009 Preliminary Levy Limit Worksheet prepared by the King County Assessor's Office; an Excel spreadsheet that I prepared to develop an estimated levy value, and finally (2) draft ordinances establishing the 2009 property tax levy. Cities are required to submit their levy requests to the Metropolitan King County Council by November 28, 2008. As has been the case in past years, the County will not have final property valuations prior to the cutoff date. Given the preliminary nature of the valuations and consideration of the 1% levy base growth constraint, I have set the recommended levy amount slightly higher than the value I calculated for the estimated allowable levy. In the final analysis the County is required to adjust downward to the maximum allowable amount, while conversely it may not make an upward adjustment. I look forward to seeing each of you on November 4` Phone: 206- 433 -1800 0 City Hall Fax.- 206- 433 -1833 www.ci.tukwila.wa.us PRELIMINARY LEVY LIMIT WORKSHEET 2009 Tax Roll TAXING DISTRICT: City of Tukwila The following determination of your regular levy limit for 2009 property taxes is provided by the King County Assessor pursuant to RCW 84.55.100. Annexed to Library District Using Limit Factor For District 11,395,893 1.0100 11,509,852 267,710,920 0 267,710,920 2.56911 687,779 12,197,631 0 12,197,631 5,123,164,972 2.38088 0 0 0 12,197, 631 12,197, 631 11,466 12,209,097 12,209,097 2.38312 11,400,000 109,852 0.96% 10/28/08 4:39 PM LevyLimitWS.doc (Note 1) Estimated Library rate: 0.36029 Calculation of Limit Factor Levy Levy basis for calculation: (2008 Limit Factor) (Note 2) x Limit Factor Levy Local new construction Increase in utility value (Note 3) Total new construction x Last year's regular levy rate New construction levy Total Limit Factor Levy Annexation Levy Omitted assessment levy (Note 4) Total Limit Factor Levy new lid lifts Regular levy assessed value less annexations Annexation rate (cannot exceed statutory maximum rate) x Annexation assessed value Annexation Levy Lid lifts, Refunds and Total First year lid lifts Limit Factor Levy Total RCW 84.55 levy Relevy for prior year refunds (Note 5) Total RCW 84.55 levy refunds Levy Correction: Year of Error +or ALLOWABLE LEVY (Note 6) Increase Information (Note 7) Levy rate based on allowable levy Last year's ACTUAL regular levy Dollar increase over last year other than N/C Annex Percent increase over last year other than N/C Annex Calculation of statutory levy Regular levy assessed value (Note 8) x Maximum statutory rate Maximum statutory levy +Omitted assessments levy Maximum statutory levy Limit factor needed for statutory levy ALL YEARS SHOWN ON THIS FORM ARE THE YEARS IN WHICH THE TAX IS PAYABLE. Please read carefully the notes on the reverse side. Using Implicit Price Deflator 11,395,893 1.0453 11,911,785 267,710,920 0 267,710,920 2.56911 687,779 12,599,564 0 12,599,564 5,123,164,972 2.45933 0 0 0 12,599,564 12,599,564 11,466 12,611,030 12,611,030 I 2.46157 11,400,000 511,785 4.49% 5,123,164,972 3.23971 16,597,569 0 16,597,569 Not usable Notes: 1) Rates for fire districts and the library district are estimated at the time this worksheet is produced. Fire district and library district rates affect the maximum allowable rate for cities annexed to them. These rates will change, mainly in response to the actual levy requests from the fire and library districts. Hence, affected cities may have a higher or lower allowable levy rate than is shown here when final levy rates are calculated. 2) This figure shows the maximum allowable levy, which may differ from any actual prior levy if a district has levied less than its maximum in prior years. The maximum allowable levy excludes any allowable refund levy if the maximum was based on a limit factor. The maximum allowable levy excludes omitted assessments if the maximum was determined by your district's statutory rate limit. If your district passed a limit factor ordinance in the year indicated, that limit factor would help determine the highest allowable levy. However, if the statutory rate limit was more restrictive than your stated limit factor, the statutory rate limit is controlling. 3) Any increase in value in state- assessed property is considered to be new construction value for purposes of calculating the respective limits State- assessed property is property belonging to inter county utility and transportation companies (telephone, railroad, airline companies and the like). 4) An omitted assessment is property value that should have been included on a prior year's roll but will be included on the tax roll for which this worksheet has been prepared. Omits are assessed and taxed at the rate in effect for the year omitted (RCW 84.40.080 -085). Omitted assessments tax is deducted from the levy maximum before calculating the levy rate for current assessments and added back in as a current year's receivable. 5) Administrative refunds under RCW 84.69.020 were removed from the levy lid by the 1981 legislature. 6) A district is entitled to the lesser of the maximum levies determined by application of the limit under RCW 84.55 and the statutory rate limit Levies may be subject to further proration if aggregate rate limits set in Article VII of the state constitution and in RCW 84.52.043 are exceeded. 7) This section is provided for your information, and to assist in preparing any Increase Ordinance that may be required by RCW 84.55.120. The increase infotuiation compares the allowable levy for the next tax year with your ACTUAL levy being collected this year. The actual levy excludes any refund levy and expired temporary lid lifts, if applicable. New construction, annexation and refund levies, as well as temporary lid lifts in their initial year, are subtracted from this year's allowable levy before the comparison is made. 8) Assessed valuations shown are subject to change from error corrections and appeal board decisions recorded between the date of this worksheet and final levy rate determination. 10/28/08 4.39 PM LevyLinntWS.doc City of Tukwila Levy Calculation 2008 Tax Year 2008 Actual Property Tax Levy 11,400,000 1% Limitation (1 -747) 1.01 Allowable Levy Prior to New Construction and Increase in Utility Values 11,514,000 New Construction Estimated Increase in Utility Value 288,998,190 2008 Regular Levy Rate 2.38088 New Construction Utility Levy 688,070 Total Estimated Allowable Levy 12,202,070 Total Estimated Levy Rate 2.38174 Recommended Levy Amount 12,250,000 Corresponding Levy Rate 2.39110 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, INCREASING THE CITY OF TUKWILA REGULAR LEVY FROM THE PREVIOUS YEAR, COMMENCING JANUARY 1, 2009, ON ALL PROPERTY, BOTH REAL AND PERSONAL, IN COMPLIANCE WITH RCW 84.55.120; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City of Tukwila has properly given notice of a public hearing, held on November 17, 2008, pursuant to RCW 84.55.120; and WHEREAS, the City, after hearing and duly considering all relevant evidence and testimony presented, has determined that the City requires an increase in property tax revenue from the previous year, in addition to the increase resulting from the addition of new construction and improvements to property and any increase in the value of State assessed property, in order to discharge the expected expenses and obligations of the City; and WHEREAS, the City has determined that it is in its best interest and necessary to meet its expenses and obligations for the property tax revenue to be increased for 2009, and the final assessed valuation calculation has been determined; NOW, THEREFORE, THE Ci Y COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. An increase in the regular property tax levy, in addition to any amount resulting from the addition of new construction and improvements to property and any increase in the value of state assessed property, is hereby authorized for the 2009 levy in the amount of $114,000, which is a percentage increase of 1.0% from the previous year. This increase is exdusive of additional revenue resulting from new construction, improvements to property, and any increase in the value of state assessed property, any annexations that have occurred and refunds made. Section 2. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 3. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force and effect January 1, 2009. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2008. ATTEST/ AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney T Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: C:IDovnments and Setting Uses \Desl'top\KellyIMSDATAIOrdinan: esiRegular Tax Levy 2009.doe SH9sn 1028/2008 Page I of 1 FINANCE AND SAFETY COMMITTEE Meeting Minutes November 4, 2008 5:00 p.m. PRESENT Councilmembers: Dennis Robertson, Chair; Pam Linder and Kathy Hougardy Staff: Shawn Hunstock, Lori Sutter, Rhonda Berry and Kimberly Matej I. PRESENTATIONS No presentations. II. BUSINESS AGENDA City of Tukwila CALL TO ORDER: Committee Chair Robertson called the meeting to order at 5:03 p.m. Finance Safety Committee A. Tax Levy Ordinances Shawn Hunstock provided background information and the calculations used to determine the 2009 property tax levy. The proposed levy amount is $12,250,000 and results in an anticipated levy rate of $2.39 per $1,000 of valuation. King County requires cities to submit levy requests no later than November 28, 2008; however the County will not have final property or utility valuations prior to this cut -off date. Assessed values for an allowable levy can be lowered based on actual calculations; however, they will not be increased. Therefore, the recommended levy amount for the City has been calculated slightly higher than the estimated allowable levy. The County has included assessed values for new construction at last year's levy rate (2.57). The value of new construction for the 2009 levy is significantly higher than it has been in the past. A public hearing is scheduled for November 17, 2008. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 10 COW FOR DISCUSSION. B. Sales Tax Report Shawn discussed the Sales Tax Report actual receipts received through August 2008. Actual sales tax revenue is slightly below budget; however, year -end receipts are anticipated to meet the budget projection of $18.5 million. In addition to the information supplied in the Committee agenda packet, Shawn distributed a breakdown of categories of businesses that the Department of Revenue believes will be potentially impacted by the streamlined sales tax. He also shared information regarding the sales tax revenue breakdown through August 2008 compared to last year's revenues. The memo provided in the Finance and Safety Committee packet will also be provided to full Council. Shawn will plan to present information regarding streamlined sales tax and respective mitigation to full Council once additional information is received from the Department of Revenue regarding the impact of streamlined sales tax and potential mitigation the City will receive. INFORMATION ONLY. C. Identification of Evaluation Criteria for Animal Control Alternatives, Rhonda Berry updated the Committee on the status of the animal control contract with King County. Although preliminary meetings have taken place between representatives from Tukwila and SeaTac, the County has still not forwarded an enhanced services contract for processing. Since King County