HomeMy WebLinkAboutFIN 2017-11-07 Item 2C - Ordinances - 2018 Tax Levy LegislationTO:
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.
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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 2017 is estimated to be
$3.45711. However, due to the 1% limitation, the Levy Limit Worksheet received from King
County estimates the City's preliminary levy rate for 2018 at $2.49969.
RECOMMENDATION
The City Council is being asked to approve the ordinance adopting the General Tax Levy and the
ordinance showing the dollar and percent increase from the previous year at the November 13,
2017 Committee of the Whole meeting and subsequent November 20, 2017 Regular Meeting. A
public hearing has also been scheduled at the November 13, 2017 Committee of the Whole.
ATTACHMENTS
Draft Ordinances
Preliminary Levy Limit Worksheet -2018 Tax Roll
W:11 Users\VickylBudget\Info Memo - 2018 Taxes with Excess levy.docx
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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, 2018, 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 13, 2017, pursuant to RCW 84.55.120; and
WHEREAS, after such hearing and after 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 2018, 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 2018 levy in
the amount of $129,634, 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.
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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, 2018.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2017.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Allan Ekberg, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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Page 2 of 2
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, 2018, ON ALL
PROPERTY, BOTH REAL AND PERSONAL, IN SAID CITY,
THAT 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, WITH AN EXCESS PROPERTY TAX
LEVY FOR THE PURPOSE OF PAYING DEBT SERVICE ON
THE CITY'S UNLIMITED TAX GENERAL OBLIGATION BONDS
ISSUED IN 2016, 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 2018 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 City, pursuant to Ordinance No. 2514, passed on November 21, 2016,
authorized the issuance and sale of $36,500,000 principal amount of the City's Unlimited
Tax General Obligation Bonds, 2016 (the "Bonds"); and has determined that to provide the
money necessary to pay the debt service requirements on the Bonds in the year 2018, an
excess property tax levy in the amount of $2,800,000 for the Bonds must be levied in year
2017, and collected in year 2018; and
WHEREAS, the final assessed valuation calculation has been determined;
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Regular and Excess 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 $6,044,327,455,
current taxes for the ensuing year commencing January 2018, in the amounts specified
below:
Rate Amount
Regular Tax Levy $2.50 $15,300,000
Excess Tax Levy $0.47 $ 2,800,000
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, 2018.
C. The excess levy is levied for the purpose of debt service payments on the
unlimited tax obligation bonds sold to finance costs related to the City's Public Safety
Plan, as submitted to the qualified electors of the City at a special election held on
November 8, 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, 2018.
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Page 2 of 3
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2017.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Allan Ekberg, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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PRELIMINARY
LEVY LIMIT WORKSHEET - 2018 Tax Roll
TAXING DISTRICT: City of Tukwila
The following determination of your regular levy limit for 2018 property taxes is provided by the King County
Assessor pursuant to RCW 84.55.100.
Annexed to Library District
Using Limit Factor
For District
14,815,806
1.0100
14, 963, 964
56, 068, 883
0
56,068,883
2.58592
144,990
15,108,954
(Note 1) Estimated Library rate: 0.36789
Calculation of Limit Factor Levy
Levy basis for calculation: (2017 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
14,815,806
1.0155
15,045,451
56,068,883
0
56,068,883
2.58592
144,990
15,190,441
0
15,108,954
6,044,327,455
2.49969
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
15,190,441
6,044,327,455
2.51317
0
0
0
15,108,954
15,108,954
22,559
15,131,513
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-)
0
15,190,441
15,190,441
22,559
15,213,000
15,131,513
ALLOWABLE LEVY (Note 6)
2.50342
14, 834, 330
129,634
0.87%
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
15,213,000 I
2.51691
14, 834, 330
211,121
1.42%
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.
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LevyLimitWS.doc
6,044,327,455
3.45711
20,895,905
0
20,895,905
Not usable
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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.
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LevyLimitWS.doc
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