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Home My WebLink AboutCOW 2015-11-09 Item 4A - Ordinances - 2016 Tax Levy LegislationCOUNCIL AGENDA SYNOPSIS nitials Meetita Date Pre ared b Mayor review Counczl review 11/09/15 PMC ❑ Resolution Mtg Date ® Ordinances A1tg Date 11116115 11/16/15 PMC ❑ Other Mtg Date SPONSOR ❑ Council ❑ Mayor ❑ HR ❑ DCD ® .Finance ❑ .Fire ❑ IT ❑ P&'R ❑ Police ❑ PIF/ SPONSOR'S The Council is being asked to approve three property tax ordinances for the 2016 property SUMMARY tax levy - one to authorize the levy, the second to approve an increase in the levy rate from the previous year and the third to declare substantial need so that the full 1% property tax increase can be assessed. Ri;'Ivi �;WL;D iw ❑ COW Mtg. ❑ CA &P Cmte ® F&S Cmte ❑ Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: N/A COMMIT TEE CI-3AIR: N/A RECOMMENDATIONS: SPONSOR /ADMIN. Finance Department COMMIT "rFli; Directly to C.O.W. per FS Chair and Council President /FS Cancelled due to NLC Conference COST IMPACT / FUND SOURCE EXPI NDl'rURI? Rt;QUIRI3D AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: MISCELLANEOUS FUNDING SOURCES, SEE DETAIL Comments: MTG. DATE RECORD OF COUNCIL ACTION 11/09/15 ITEM INFORMATION ITEM NO. 3.A. & 4.A. STAFF SPONSOR: PEGGY MCCARTHY ORIGINAI,AGI?NDA DA'1'I: 11/09/15 A(;ENDA Pri �,1 Trr1,i-, Approve property tax ordinances for 2016 property tax levy. CATEGORY ® Discussion Mtg Date 1119115 ❑ Motion All Date ❑ Resolution Mtg Date ® Ordinances A1tg Date 11116115 ❑ Bidzlavard AI g Date ® PublicHearin,g Nltg Date 1119115 ❑ Other Mtg Date SPONSOR ❑ Council ❑ Mayor ❑ HR ❑ DCD ® .Finance ❑ .Fire ❑ IT ❑ P&'R ❑ Police ❑ PIF/ SPONSOR'S The Council is being asked to approve three property tax ordinances for the 2016 property SUMMARY tax levy - one to authorize the levy, the second to approve an increase in the levy rate from the previous year and the third to declare substantial need so that the full 1% property tax increase can be assessed. Ri;'Ivi �;WL;D iw ❑ COW Mtg. ❑ CA &P Cmte ® F&S Cmte ❑ Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: N/A COMMIT TEE CI-3AIR: N/A RECOMMENDATIONS: SPONSOR /ADMIN. Finance Department COMMIT "rFli; Directly to C.O.W. per FS Chair and Council President /FS Cancelled due to NLC Conference COST IMPACT / FUND SOURCE EXPI NDl'rURI? Rt;QUIRI3D AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: MISCELLANEOUS FUNDING SOURCES, SEE DETAIL Comments: MTG. DATE RECORD OF COUNCIL ACTION 11/09/15 11/16/15 MTG. DATE ATTACHMENTS 11/09/15 Informational Memorandum dated 10/28/15 Draft Ordinances and Preliminary Levy Limit Worksheet (No FS minutes /Meeting cancelled due to NLC Conference) 11/16/15 2 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: October 28, 2015 SUBJECT: 2016 Property Tax Levy ISSUE By November 30, 2015, approve ordinances adopting the general property tax levy for 2016, increasing the regular levy from the previous year, and declaring substantial need thereby enabling the 1% increase. BACKGROUND A Public Hearing for adoption of the 2016 property tax levy is required by RCW 84.55.120. The Hearing is scheduled for November 9, 2015. The City was notified on October 15, 2015 that the assessed value for Tukwila for 2016 is projected to be $5,222,624,289. State law allows the City to increase property taxes by 1% or the Implicit Price Deflator (IPD), whichever is less unless an additional ordinance showing substantial need is adopted by City Council. The ordinance showing substantial need must be approved by a majority plus one. The IPD for calculating the 2016 property tax levy is .0025 %, substantially less than 1 %. The allowable levy projected by King County and documented on the Preliminary Levy Limit Worksheet -2016 Tax Roll using the IPD is $14,388,492. The allowable levy using 1% is 14,495,407, representing additional property tax revenue of $106,915 if City Council approves the ordinance showing substantial need. The budget adopted by Council for the 201 -2016 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 $14,700,000 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. 3 INFORMATIONAL MEMO Page 2 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. The maximum allowable levy for 2016 is estimated to be $3.39836. However, due to the 1% limitation, the Levy Limit Worksheet received from King County estimates the City's preliminary levy rate for 2016 at $2.77550, the ordinance estimates the rate at $2.82 and the actual rate, after all valuations and the final King County worksheet have been completed, will be a rate that lies within the range of these two rates. RECOMMENDATION The City Council is being asked to approve the ordinance adopting the General Tax Levy, the ordinance showing substantial need to increase property taxes by the full 1 %, and the ordinance showing the dollar and percent increase from the previous year at the November 9, 2015 Committee of the Whole meeting and subsequent November 16, 2015 Regular Meeting. A public hearing has also been scheduled at the November 9, 2015 Committee of the Whole. Draft Ordinances Preliminary Levy Limit Worksheet -2016 Tax Roll 4 WA2015 Info Mennos\Property Taxes.dou 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, 2016, 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 9, 2015, 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 2016, 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 2016 levy in the amount of $94,870, which is a percentage increase of 1 % 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 Processing \Ordinances \Regular Tax Levy Increase 10 -12 -15 vc:bjs Page 1 of 2 5 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, 2016. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing \Ordinances \Regular Tax Levy Increase 10 -12 -15 VC:bjs N. Page 2 of 2 DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, RELATING TO THE LIMITING FACTOR FOR THE REGULAR PROPERTY TAX LEVY ABOVE THE RATE OF INFLATION (IMPLICIT PRICE DEFLATOR); PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Tukwila has considered its budget for the 2015 -2016 biennium; and WHEREAS, in the course of considering the 2015 -2016 biennial budget, the City Council reviewed all sources of revenue and examined all anticipated expenses and obligations; and WHEREAS, due to the needs regarding parks, residential and arterial streets, City facilities, and police and fire services, the City Council found that there is substantial need to increase the regular property tax limit factor above the rate of inflation; and WHEREAS, the City Council desires to continue that rate in order to meet service needs in the City in 2016 and beyond; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Regular Tax Levy. The City Council of the City of Tukwila finds that there is substantial need to increase the regular property tax limit factor above the rate of inflation, and hereby establishes that the limit factor for the regular levy for the calendar year 2016 shall be 101% of the highest amount of the regular property taxes that could have been lawfully levied in Tukwila in any year since 1985. 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. W: Word Processing \Ordinances \Property tax levy limiting factor 10- 12- 15.doc vc:bjs Page 1 of 2 7 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, 2016. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 12015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Jim Haggerton, Mayor Filed with the City Clerk:_ Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing \Ordinances \Property tax levy limiting factor 10- 12- 15.doc Vc:bjs i Page 2 of 2 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, 2016, 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 2016 and the amounts necessary and available to be raised by ad valorem taxes on real, personal and utility property; and WHEREAS, the following sentence is provided for information only: The maximum Statutory Levy Rate for the City of Tukwila, as allowed by RCW 84.52.043, is $3.825, which includes $0.225 for the Firemen's Pension Fund as allowed by RCW 41.16.060; 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 $5,222,624,289, current taxes for the ensuing year commencing January 2016, in the amount and at the rates specified below: Rate Amount Regular Tax Levy $2.82 $14,700,000 W: Word Processing \Ordinances \General Tax Levy 10- 12- 15.doc VC:bjs Page 1 of 2 n E%i 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, 2016. 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, 2016. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney W: Word Processing \Ordinances \General Tax Levy 10- 12- 15.doc VC:bjs W Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Page 2 of 2 PRELIMINARY LEVY LIMIT WORKSHEET - 2016 Tax Roll TAXING DISTRICT: City of Tukwila The following determination of your regular levy limit for 2016 property taxes is provided by the King County Assessor pursuant to RCW 84.55..100. Annexed to Library District (Note 1) Estimated Library rate: 0.42664 Using Limit Factor Using Implicit For District Calculation of Limit Factor Levy Price Deflator 14,274,375 Levy basis for calculation: (2015 Limit Factor) (Note 2) 14,274,375 1.0100 x Limit Factor 1.0025 14,417,119 = Levy 14,310,204 22,560,204 Local new construction 22,560,204 0 + Increase in utility value (Note 3) 0 22,560,204 = Total new construction 22,560,204 2.84189 x Last year's regular levy rate 2.84189 64,114 = New construction levy 64,114 14,481,233 Total Limit Factor Levy 14,374,318 Annexation Levy 0 Omitted assessment levy (Note 4) 0 14,481,233 Total Limit Factor Levy + new lid lifts 14,374,318 5,222,624,289 _ Regular levy assessed value less annexations 5,222,624,289 2.77279 = Annexation rate (cannot exceed statutory maximum rate) 2.75232 0 x Annexation assessed value 0 0 = Annexation Levy 0 Calculation of statutory levy Lid lifts, Refunds and Total Regular levy assessed value (Note 8) 0 + First year lid lifts 0 14,481,233 + Limit Factor Levy 14,374,318 14,481,233 = Total RCW 84.55 levy 14,374,318 14,174 + Relevy for prior year refunds (Note 5) 14,174 14,495,407 = Total RCW 84.55 levy + refunds 14,388,492 Levy Correction: Year of Error (+or-) 14,495,407 ALLOWABLE LEVY Note 6 14,388,492 Increase Information (Note 7) 2.77550 Levy rate based on allowable levy 2.75503 14,322,249 Last year's ACTUAL regular levy 14,322,249 94,870 Dollar increase over last year other than N/C — Annex - 12,045 0.66% Percent increase over last year other than N/C — Annex -0.08% Calculation of statutory levy Regular levy assessed value (Note 8) 5,222,624,289 x Maximum statutory rate 3.39836 = Maximum statutory levy 17,748,357 +Omitted assessments levy 0 = Maximum statutory levy 17,748,357 Limit factor needed for statutory levy Not usable ALL YEARS SHOWN ON THIS FORM ARE THE YEARS IN WHICH THE TAX IS PAYABLE. Please read carefully the notes on the reverse side. 10115115 11:12 AM LevyLimitWS.doc 11 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. 10/15/15 11:12 AM LevyLimitWS.doc 12