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Home My WebLink AboutCOW 2013-11-12 Item 4A - Ordinances - 2014 Tax Levy LegislationCOUNCIL A G !INDA SYNOPSIS Initials Meeting Date Prepared by M�a;p,r's review Council review 11/12/13 PMC ,,e egit, 11/18/13 PMC ITEM INFORMATION ITEM No. 3A & 4A (1&2) STAFF SPONSOR: PEGGY MCCARTHY ORIGINAL AGENDA DATE: 11/13/12 AGENDA ITEM TITLE An ordinance levying property taxes for 2014 and an ordinance increasing the regular property tax levy one percent from the previous year. CATEGORY Discussion Mtg Date 11/22/13 SPONSOR ❑ Council ❑ Mayor LJ HR n DCD Finance ❑ Fire ❑ IT ❑ P&R ❑ Police (7 PJV ❑ Motion Mtg Date ❑ Resolution Mrs Date ® Ordinance Mtg Date 11/18/13 ❑ Bid Award Nits Date ® Public Hearing Mtg Date 11/12/13 ❑ Other Mtg Date SPONSOR'S SUMMARY City Council is being asked to approve an ordinance levying property tax for 2014 and an ordinance increasing the regular property tax levy one percent from the previous year. REVIEWED BY ❑ COW Mtg. ❑ Utilities Cmte DATE: 11/05/13 ❑ CA &P Cmte Arts Comm. F &S Cmte ❑ Transportation Crnte ❑ Parks Comm. n Planning Comm. COMMTI."IEE CHAIR: ROBERTSON RECOMMENDATIONS: SPONSOR /ADMIN. Finance Department COMMITTEE unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED Fund Source: Comments: MTG. DATE 11/12/13 MTG. DATE 11/12/13 11/18/13 AMOUNT BUDGETED APPROPRIATION REQUIRED RECORD OF COUNCIL ACTION ATTACHMENTS Informational Memorandum dated 10/30/13 Draft Ordinances (2) Preliminary Levy Limit Worksheet Property tax Historical Data and Projections Minutes from the Finance and Safety Committee Meeting of 11/05/13 2 TO: City of Tukwila Jim Haggerton, Mayo; INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: 10/30/13 SUBJECT: 2014 Property Tax Levy ISSUE Approval of ordinances increasing the regular levy from the previous year and adopting the general property tax levy for 2014 by November 29, 2013. BACKGROUND A Public Hearing for adoption of the 2014 property tax levy is required by RCW 84.55.120. The Hearing is scheduled for November 12, 2013. The City was notified on October 15, 2013 that the assessed value for Tukwila for 2014 is projected to be $4,707,092,379. The allowable levy projected by King County and documented on the Preliminary Levy Limit Worksheet -2014 Tax Roll is $14,043,979 representing the maximum 1% increase allowed by law. DISCUSSION Levy Amount The assessed value and the allowable levy are subject to change until final levy rate determination. A levy amount of $14,100,000 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. If the final allowable levy is more than the ordinance amount, a revised ordinance will be presented to Council at the Regular Meeting on December 2, 2013 for approval. Levy Limit RCW 27.12.390 allows for a maximum statutory levy rate for cities at $3.60 less the actual regular levy made by a library district. RCW 41.16.060 also allows for an additional levy of $0.225 if a city has a firemen's pension fund. Prior to 2014, even though the City has had a firemen's pension fund for many years, this additional levy limit has not been reflected in the City's Levy Limit Worksheet. The County is now aware that the City does have a firemen's pension fund and will adjust the City's maximum statutory levy rate to $3.325 (City levy rate $3.60 less library district levy $0.50 plus firemen's pension levy rate $0.225). The increase in the levy rate gives the City additional capacity for future growth or levy lid lifts. The Levy Limit Worksheet received from King County estimates the City's preliminary levy rate for 2014 at $2.98358. 3 4 INFORMATIONAL MEMO Page 2 RECOMMENDATION The Council is being asked to approve the ordinance adopting the General Tax Levy and the ordinance adopting the Regular Tax Levy at the November 12, 2013 Committee of the Whole meeting and subsequent November 18, 2013 Regular Meeting. A public hearing has also been scheduled at the November 12, 2013 Committee of the Whole. ATTACHMENTS Draft Ordinances Preliminary Levy Limit Worksheet -2014 Tax Roll Users \VickylBudget12014 Info Memo Properly Taxes.doc DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, LEVYING THE GENERAL TAXES FOR THE CITY OF TUKWILA IN KING COUNTY FOR THE FISCAL YEAR COMMENCING JANUARY 1, 2014, ON ALL PROPERTY, BOTH REAL AND PERSONAL, IN SAID CITY, WHICH IS SUBJECT TO TAXATION FOR THE PURPOSE OF PAYING SUFFICIENT REVENUE TO CARRY ON THE SERVICES OF THE SEVERAL DEPARTMENTS OF SAID CITY FOR THE ENSUING YEAR, AS REQUIRED BY LAW; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Tukwila has considered the City's anticipated financial requirements for 2014 and the amounts necessary and available to be raised by ad valorem taxes on real, personal and utility property; and WHEREAS, the final assessed valuation calculation has been determined; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Regular Tax Levy. A. There shall be and hereby is levied on all real, personal and utility property in the City of Tukwila, in King County, whose estimated assessed valuation is $4,707,092,379, current taxes for the ensuing year commencing January 2014, in the amount and at the rates specified below: Regular Tax Levy Amount $14,100,000 B. The said taxes herein provided for are levied for the purpose of payment upon the general bonded indebtedness of the City of Tukwila, the General Fund, and for the maintenance of the departments of the municipal government of the City of Tukwila for the fiscal year beginning January 1, 2014. W: Word Processinglordinances\General Tax Levy 10 -24 -13 VC:bjs Page 1 of 2 5 6 Section 2. Collection. This ordinance shall be certified to the proper County officials, as provided by law, and taxes here levied shall be collected to pay to the Finance Director of the City of Tukwila at the time and in the manner provided by the laws of the State of Washington for the collection of taxes for non - chartered code cities. Section 3. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section /subsection numbering. Section 4. 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 5. 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, 2014. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2013. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Shelley M. Kerslake, City Attorney W: Word ProcessinglOrdinances\General Tax Levy 10 -24 -13 VC:bjs Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Page 2 of 2 MEM' 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, 2014, 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 12, 2013, pursuant to RCW 84.55.120; and WHEREAS, after hearing and duly considering all relevant evidence and testimony presented, the City Council has determined that in order to discharge its expected expenses and obligations 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; and WHEREAS, the City Council has determined it is in the City's best interest and necessary to meet its expenses and obligations for the property tax revenue to be increased for 2014, and the final assessed valuation calculation has been determined; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS 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 2014 levy in the amount of $112,733, which is a percentage increase of 1.0% from the previous year. This increase is exclusive of additional revenue resulting from new construction, improvements to property, any increase in the value of State - assessed property, any annexations that have occurred and refunds made. W: Word ProcessinglOrdinances \Regular Tax Levy Increase 10 -24 -13 VC :bjs Page 1 of 2 7 8 Section 2. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section /subsection numbering. Section 3. 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 4. 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, 2014. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2013. ATTEST /AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Shelley M. Kerslake, City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Pracessinglordinances \Regular Tax Levy Increase 10 -24 -13 \cads Page 2 of 2 PRELIMINARY LEVY LIMIT WORKSHEET -- 2014 Tax Roll TAXING DISTRICT: City of Tukwila The following determination of your regular levy limit for 2014 property taxes is provided by the King County Assessor pursuant to RCW 84.55.100. Annexed to Library District Using Limit Factor For District (Note 1) Estimated Library rate: 0.50000 Calculation of Limit Factor Levy 13,827,003 1.0100 13,965,273 13,190,837 0 13,190,837 2.98778 39,411 14,004,684 Levy basis for calculation: (2013 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 Using Implicit Price Deflator 13,827,003 1.0314 14,261,171 13,190,837 0 13,190,837 2.98778 39,411 14,300,582 0 14,004,684 4,707,092,379 2.97523 0 0 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 0 14,300,582 4,707,092,379 3.03809 0 0 0 14,004,684 14,004,684 39,295 14,043,979 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 -) 14,043,979 2.98358 13,852,540 112,733 0.81% 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 0 14,300,582 14,300,582 39,295 14,339,877 14,339,877 1 3.04644 13, 852,540 408,631 2.95% 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 4,707,092,379 3.10000 14,591,986 0 14,591,986 0.0496 ALL YEARS SHOWN ON THIS FORM ARE THE YEARS IN WHICH THE TAX IS PAYABLE. Please read carefully the notes on the reverse side. 10/30/13 9:41 AM LevyLimitWS.doc 9 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 information 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. 10/30/13 9:41 AM LevyLimitWS.doc 10 Property tax Historical Data and Projections Year Levy Collected to % Collected Date to Date 2014 Preliminary Levy (1) Projected Levy per Adopted Budget and Increase Attachment A j11 385 ;080. 3;225,338 8.81 %' 2012 13,705,220 13,521,621 98.66% 2013 13,814,401 12,394,823;; 89.72% 2014 14,043,979 14,321,617 15, 14 ;679,000,x. 5% 2016 15,046,000 2.5% 01.7; 5;422,000 2 5% (1) The projected levy per Budget and Attachment A includes property from the annexation that did not occur. 11 12 Finance & Safety Committee Minutes November 5, 2013 — Pape 2 Enforcement staff time associated with explaining the fee as well as with identifying criteria under the current system. While exempting properties with 1 -4 units from the RGRL fee will reduce annual revenue by approximately $11,495, the savings in staff time makes this a cost - effective proposal. Additionally, Code Enforcement staff will have more time to focus on health, safety and maintenance components of rental housing. MAJORITY APPROVAL. FORWARD TO NOVEMBER 18 REGULAR MEETING FOR DISCUSSION UNDER NEW BUSINESS. E. Ordinances: 2014 Property Tax Levy Staff is seeking Council approval of two ordinances: one that would increase the City's Regular Property Tax Levy from 2013, and one that would levy General Taxes. These ordinances are presented to the Council on an annual basis. According to the King County Assessor, the projected assessed value for Tukwila is $4,707,092,379. The allowable levy projected by King County is $14,043,979, representing the maximum 1% increase allowed by law. This is subject to change until the final rate is determined by the County. A levy amount of $14,100,000 is proposed in the draft ordinance and may be adjusted based on that determination. Because the County is now aware that the City has a firemen's pension fund, the City's maximum statutory levy rate is $3.325, pursuant to RCW 27.12.390. This is an increase that gives the City additional capacity for future growth or levy lid lifts. Staff distributed a table indicating actual property tax collection for 2011 -2013 and projections for 2014 -2017. Committee members asked that this table be attached to the information memo for Committee of the Whole discussion. A public hearing is scheduled for November 12, 2013. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 12 COMMITTEE OF THE WHOLE FOR PUBLIC HEARING AND DISCUSSION. F. Budget Legislation 1) Staff is seeking Council approval of a resolution to adopt the 2014 -2019 Financial Planning Model and Capital Improvement Program (CPP). Drafts of these documents were presented to the Council at a workshop on August 28, and the Utilities and Transportation Committees conducted further review in September. Staff reviewed an attachment to the informational memo that lists all of the changes made to the CJP since it was first proposed in August. Committee members asked clarifying questions of items they considered to be large policy questions, including: Fund 104: Bonding of total $5,965,000.00 for the Boeing Access Road over BNRR Bridge Rehabilitation and Interurban Avenue South projects. Committee members and staff agreed that further review of the City's debt policies in general would be valuable, using this as an example. Fund 301/412: Tukwila 205 Levee, Riverton Creek Flap, and Lower Gilliam projects moved from Parks to Surface Water Fund. This will be reviewed further in Committee of the Whole. Additionally, the Utilities Committee has just forwarded to the Committee of the Whole an ordinance amending the definition of Surface Water Management Conveyance Systems to include dikes, levees, and revetments. 2) Staff is seeking Council approval of an ordinance to amend the 2013 Budget. Staff provided an overview of the proposed changes, including new proposals, items over budget, previous Council approvals, revenue backed expenditures, accounting changes, and carryover. A public hearing is scheduled for November 12, 2013. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 12 COMMITTEE OF THE WHOLE FOR PUBLIC HEARING AND DISCUSSION. G. Ordinance: Ethics Code As follow up to the Committee's requests during the October 22 meeting, City Attorney Shelley Kerslake returned with three options for a proposed Ethics Code applicable to elected and appointed officials and City staff. The first option establishes a 5 member Ethics Board comprised of existing Commission Chairs with adjudication of complaints by the City Council. The second option establishes a 5 member Ethics Board comprised of existing Commission Chairs with adjudication of complaints by the Board itself. The third option establishes an Ethics Board comprised of three new appointees by the Council and two by the 13