HomeMy WebLinkAboutCOW 2018-11-13 Item 4A - Ordinances - 2019 General Tax LevyCOUNCIL AGENDA SYNOPSIS
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11/13/18
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11/19/18
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ITEM INFORMATION
ITEM No.
3.A. & 4.A.
STAFF SPoNsoR: VICKY CARLSEN
ORIGINAL AGENDA DATE: 11/13/18
AGENDA ITI NI TITLE Approve
property tax ordinances for 2019 property tax levy.
CATIGoRy E Disausion
11/13/18
E Motion
Mt,g Date
E Resolution
Nils Dale
Z Ordinance
Mfg Date 11/19/18
E Bid Award
Mrs Date
n Public Hearin,gLJ
Other
Mt,g Date
Mtt Dale
At Date Date 11/13/18
SP ONSOR Council Mayor EFIR EDCD
EFire ETS EP&R Po/jc EPW EQrnrt
1 Finance
SI' ()Mule S The Council is being asked to approve two property tax ordinances for the 2019 property
summ,\Ry tax levy - one to authorize the levy and the second to approve an increase in the levy from
the previous year.
REvikwi BY E C.O.W. Mtg. E CDN Comm
11] Trans &Infrastructure Arts Comm.
DATE: 11/6/18
r1 Finance
Comm. E Public Safety Comm.
Comm. 111 Planning Comm.
CHAIR: QUINN
0 Parks
COMMITTEE
RECOMMENDATIONS:
SPoNsoR/ADmIN.
Commilikk
Finance Department
Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
1.,:xl,KNDI1uRE REQUIRIA) AMOUNT BUDGETED APPROPRIATION REQUIRED
$ $ $
Fund Source:
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
' 11/13/18
MTG. DATE
ATTACHMENTS
11/13/18
Informational Memorandum dated 11/06/18
Draft Ordinance
Preliminary Levy Limit Worksheet
Minutes from the Finance Committee meeting of 11/6/18
11/19/18
2
TO:
FROM:
BY:
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
Finance Committee
Peggy McCarthy, Finance Director
Vicky Carlsen, Deputy Finance Director
Aaron Williams, Fiscal Coordinator
CC: Mayor Ekberg
DATE: November 6, 2018
SUBJECT: 2019 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 2019 by November 30, 2018.
BACKGROUND
A Public Hearing for adoption of the 2019 property tax levy is required by RCW 84.55.120. The
Hearing is scheduled for November 13, 2018.
The City was notified on October 23, 2018 that the assessed value for Tukwila for 2019 is
projected to be $6,709,378,301.
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 scheduled for December 2036. The
total excess levy requirement for 2019 is $2,840,000 with an approximate levy rate of $0.43 per
thousand.
The budget proposed to Council for the 2019-2020 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 $16,100,000 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.
Also included in the tax levy ordinance is an excess levy in the amount of $2,840,000 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.
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 2019 is estimated to be
$3.49003. However, due to the 1% limitation, the Levy Limit Worksheet received from King
County estimates the City's preliminary levy rate for 2019 at $2.37331.
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,
2018 Committee of the Whole meeting and subsequent November 19, 2018 Regular Meeting. A
public hearing has also been scheduled at the November 13, 2018 Committee of the Whole.
ATTACHMENTS
Draft Ordinances
Preliminary Levy Limit Worksheet-2019 Tax Roll
Z:ICouncil Agenda Items\Finance111.6 FinancelInfo Memo - 2019 Taxes with Excess levy.docx
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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, 2019, 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 2019 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 $3.490, 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 2019, an
excess property tax levy in the amount of $2,840,000 for the Bonds must be levied in year
2018, and collected in year 2019; and
WHEREAS, the final assessed valuation calculation has been determined;
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Page 1 of 3
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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 $6,709,378,301,
current taxes for the ensuing year commencing January 2019, in the amounts specified
below:
Regular Tax Levy
Excess Tax Levy
Rate Amount
$2.37 $16,100,000
$0.43 $ 2,840,000
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, 2019.
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, 2019.
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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 , 2018.
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 3 of 3
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8
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, 2019, 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, 2018, 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 2019, 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 2019 levy in
the amount of $128,824, which is a percentage increase of 0.85% 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, 2019.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2018.
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
Pa , r /T
LEVY LIMIT WORKSHEET - 2019 Tax Roll
TAXING DISTRICT: City of Tukwila
The following determination of your regular levy limit for 2019 property taxes is provided by the King County
Assessor pursuant to RCW 84. 55.100.
Annexed to Library District
Using Limit Factor
For District
15,138, 333
1.0100
15,289,716
241,886,848
0
241, 886, 848
2.46282
595,724
15,885,440
(Note 1) Estimated Library rate: 0.33497
Calculation of Limit Factor Levy
Levy basis for calculation: (2018 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
15,138,333
1.0217
15,466,683
241,886,848
0
241, 886, 848
2.46282
595,724
16,062,407
0
15,885,440
6,709,378,301
2.36765
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
16,062,407
6,709,378,301
2.39402
0
0
0
15, 885,440
15,885,440
38,002
15,923,442
15,923,442
2.37331
15,160,892
128,824
0.85%
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
0
16,062,407
16,062,407
38,002
16,100,409
16,100,409
2.39969
15,160, 892
305,791
2.02%
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.
10/31/18 9:58 AM
LevyLimitWS.doc
6,709,378,301
3.49003
23,415,932
0
23,415,932
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.
10/31/18 9:58 AM
LevyLimitWS.doc
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Finance Committee Minutes November 6, 2018
B. TAX LEVY LEGISLATION
Staff is seeking Council approval of two ordinances relating to property tax: one that would
increase the City's Regular Property Tax Levy from 2018, and one that would levy general and
excess property 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
$6,709,378,301. The ordinance to set the general tax levy also includes the excess levy related to
the Public Safety Plan, which will be assessed as long as the bonds are outstanding. The total
excess levy requirement for 2019 is $2,840,000 with an approximate levy rate of $0.43 per
thousand. The maximum allowable levy is estimated to be $3.49003, but due to the 1% limitation,
the preliminary levy rate is estimated to be $2.37331. UNANIMOUS APPROVAL. FORWARD TO
NOVEMBER 13, 2018 COMMITTEE OF THE WHOLE.
C. BUDGET LEGISLATION
Staff is seeking Council approval of an ordinance to adopt the 2019-2020 Biennial Budget and a
resolution to adopt the 2019-2020 Financial Planning Model and Capital Improvement Program.
These are the legislative mechanisms to adopt the budget and CIP but the Council still has
budget discussion scheduled for the next several Council meetings. FORWARD TO NOVEMBER
13, 2018 COMMITTEE OF THE WHOLE FOR PUBLIC HEARING.
D. RESOLUTION: FINANCIAL POLICIES
Staff is seeking Council approval of a resolution that would amend the General Financial Policies
that are included as appendices to the adopted Budget and Capital Improvement Program. The
policies represent values and expectations for financial planning, budging, accounting, report
and other management practices. Revisions for the next biennium include two new policies and
minor adjustments to the others. Proposed new policy FP-7 would clarify the interpretation of
TMC 3.32.040 to mean that if sufficient appropriation exists to cover a capital purchase within the
Mayor's signing authority, it is deemed budgeted and does not require Committee approval.
Proposed new policy GF-6 states that the City Council will receive a list of contracts on a quarterly
basis, proposed to begin in 1st Quarter 2019. Councilmember Kruller questioned whether the
proposed interpretation of "unbudgeted" in TMC 3.32.040 would reduce Council's visibility to
certain transactions. Councilmember Robertson expressed that Council time could be better
spent on more impactful issues and he supports the interpretation. Committee Chair Quinn
indicated this interpretation, along with the new policy on contract reporting, would move the
Council forward. Policy GF-5 was also discussed, though no revisions to this policy were
proposed. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 13, 2018 COMMITTEE OF THE
WHOLE.
E. AGREEMENT: BUSINESS LICENSING
Staff is seeking Council approval of an agreement with the Washington State Department of
Revenue Business License Services (BLS) to establish the terms under which BLS will act as the
City's agent for processing business licenses. Engrossed House Bill 2005 requires any city with a
general business license to partner with the state on a combined license service. UNANIMOUS
APPROVAL. FORWARD TO NOVEMBER 19, 2018 REGULAR CONSENT AGENDA.
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