HomeMy WebLinkAbout2004-066 2005 Ad Valorem Tax ORDINANCE B
ORDINANCE NO. 2004 — 66
AN ORDINANCE fixing and levying the amount of ad valorem taxes necessary to balance
estimated revenue with estimated expenditures for the 2005 Budget for
the City of Yakima.
WHEREAS, the City Council finds that the total net amount of $14,016,861 in revenue
must be raised by ad valorem taxes on real and personal property within the corporate limits of
the City of Yakima to balance estimated revenues and expenditures for the 2005 Budget for the
City of Yakima, now therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA.
Section 1 There is hereby fixed to be raised by general property taxes upon real
and personal property within the City of Yakima the amount of $14,016,861 for the following
purposes.
General Government Levy
Operating Funds $12,311,082
Firemans' Relief & Pension Fund 1,405,779
Amount of tax levy for General
Government Purposes (1) $13,716,861
Special Purpose Tax Levy 300,000
Total Levy Amount (1) $14,016,861
(1) Includes an additional $100,000 to provide for final adjustments in State assessed, new
construction and annexation values.
Section 2. The City Clerk is directed to transmit and file a certified copy of this
ordinance with the Board of Yakima County Commissioners and the Yakima County Assessor
on or before November 15, 2004.
Section 3 Pursuant to Article VI, Section 2 of the Yakima City Charter, this
ordinance shall take effect on November 2, 2004.
PASSED BY THE CITY COUNCIL, signe • and approv- t his 2nd day of
November, 2004. /
/ -•r __
ATTEST Paul P George, Mayor
City Clerk
Publication Date: 11 -5 -2004
Effective Date: 11 -5 -2004
cje /ad- valoremord 2005 cje final
EXI-III3IT I
City of Yakima
101% Tax Limitation Calculation
2004 TAX 200.5
ASSESSED RATE LEVY
VALUES APPLIED DOLLARS
Prior Year (2004) $3,824,096 823 $3 4718 $13,276,452
1% Increase $132 765
Base 101% $13,409,217
Valuation Increase $78,663 034 N/A $0
New Construction $53 651 464 $3 4718 $186,267
State Assessed Value $3 4718 $0
101% Tax Limit
Before Annexations $3 962 642 231 $3 4309 $13,595 483
Add for Annexation $6,230 910 $3 4309 $21 378
101% Limit for
Subsequent Years $1968.873 141 $3 4309 $13 616 861
Plus Contingency $100000
Total- ordinance $13 716 861
State of Washington
Constitutional Limit
Assessed Valuation $3,968,873 141 $3 6000 $14,287,943
Levy Margin S671,082
2004 Levy for Collection in 2005 $13,616 861
cjc 10/27/2004
Attachment #1
Property taxes provide for 26 % of all General Government revenue, which excludes the
Firemen's Beret and Pension costs The graph below depicts the allocation of the City's
property tax revenues
Figure III - 4
Property Tax Allocation by Function
2005 General Levy
Propert Taz Total -- $13,453,121
General Fund Fire and Polrc�
$4,386,221 Pensions
32.61% $2,661 451
1978%
r ,4„,r,,,evim,,„,
vi,44407),,4Ai,.,
,,„..1,,,,,4k,z41,,,,,,.„,.
x R,: P+'c t �.
° 41,1' ' 4' 4 r ;*-'M y tr
a All ( 1)
s h ' ," ',, + 'a � 5it' Library
I " �i ' ° ,., ,, ' , i ,' ! $1,314,107
:k a P a $ nY
. .*' S. ""' �p ' ' w + has -- +' � 9.77%
{ p � 4
_ . l a r a SS' " .' - r . s 4* -,
.,: Parks
$1,841,985
Streets
$3,249,357 13 6y' %,
2415'%
(1) Reflects 7% decrease from 2004.
111 -8
Table III - 5
2005 PROPOSED
GENERAL PROPERTY TAX LEVY
2004 2005 2004
2003 Year -End Budget vs.
Actual Estimate Projection 2005
General $5,055,799 $5,319,893 $5,641,893 6 1%
Library 1,400,115 1,414,107 1,314,107 (7 1%)
Parks & Recreation 1,841,750 1,841,985 1,841,985 0 0%
Streets/Traffic 3,185,249 3,185,611 3,249,357 2.0%
Sub -Total -- General Government 11,482,913 11,761,629 12,047,342 2.4%
Firemen's Relief and Pension 1,364,889 1,378,215 1,405,779 2.0%
Total $12,847,802 $13,139,844 $13,453,121 2.4%
The City has compiled data from the State Auditor's Office that identifies per capita
property tax for comparable cities throughout the State The following chart (Figure III
- 5) compares the City's per capita property tax income for 2002 (the last year informa
is available) It shows the City of Yakima's property tax per capita is $147, which is $56
less than the average of all the comparable cities. Yakima ranks fourth lowest in tax per
capita of the 12 comparable cities (see chart below)
Figure III - 5
Comparable Cities between 25,000 and 85,000 in population
$350
2002 PER CAPITA PROPERTY TAXES $341
c:
1
0
i $282
$300 Yakima's per capita property tax is $147 which is $ 56 $265
o LESS than the average per capita city property tax of $ 203 $259
o
$250 -
o $201 $209 $210
-8 $200 - Yaldma $147
$177
R.
4
$150 $126 $127
$100 ). A
Y
c $0 -
x o a d x a
Data Compiled tram the State Auditor s Local Government Comparative Statistics
III -9
Attachment #2
Figure III -1
2004 Year -End Estimate and Year 2005 Budget
General Government Resources
Sales Tax /Criminal Justice Sales Tax I,m.w.i e'!r !'k woa,,, ' , . � , ��„ ,' ;n. ,, t. , 7., , :, skf; :;wm %qi G , ew,'; = rc.:ae, ' 4 912,165,000
I
Property Tax I 'y.r..w., e,o;, -:: 4 4' , , 'A ?v "ea,'.:. «r ",*s,. , " 4 ,P "''' 'vr'_ VIP. "XtrA'AMIPr "r," P,2 ?4 -..:'1 412,047 142
I
Franchise & Utility Taxes ",+ +. r . tTM , ,W ^.eA, ...wirZ:. ,1 ,4 : a', t . **. !V �c::a, s, ,N,A 49,260,000
11 i
Charges foi Services
State Shared Revenue ID'°sa,; :,, 'r:.;• °. $2,294
200; vs 2004 Estimate
Decrease in Total Resources
Fines and Forteitures 1" J $1,462,200 Amount ($1,060,031)
Percent (2.0%)
Other Taxes ra;k", :' ° 1 41 44,700
Other Revenue 1 $77
Transters from other Funds , .m°t ?;102000
( ❑ _0041/E Estimate 0 2005 13udget
Other Intergovernmental E $=,22 9 81
Licenses and Permits B 4497,400
Beginning Fund Balance m ,> 2
I
$0 $2,000,000 $4,000,000 46,000,000 $8,000,000 $10,000,000 $12,000,000
GENERAL GOVERNMENT THREE YEAR COMPARISON
2005 vs. 2004
2003 2004 Percent 2005 % of Increase Percent
Source Actual Estimate Change Budget 2004 Total (Decrease) Change
General Sales Tax $11,101,740 $11,250,000 134% $11,450,000 24.57% $200,000 1.78%
Crim. Justice Sales Tax* 517,715 680,000 31.35% 715,000 1.53% 35,000 5 15%
Property Tax 11,482,913 11,761,629 2.43% 12,047,342 25.86% 285,713 2.43%
Franchise & Util. Taxes 8,700,266 9,122,380 4.85% 9,260,000 19.88% 137,620 1.51%
Charges for Services 4,639,861 4,878,260 5.14% 5 10 74% 123,610 2.53%
State Shared Revenue 2,191,674 2,233,566 1 91% 2,294,066 4.92% 60,500 2.71%
Fines and Forfeitures 1,396,796 1,430,200 2.39% 1,462,200 3 14% 32,000 2.24%
Other Taxes 1,491,635 1,551,200 3 99% 1,544,700 3.32% (6,500) (0 42 %)
Other Revenue 348,657 781,104 124.03% 775,210 1.66% (5,894) (0 75 %)
Transfers from other Funds 968,955 1,097,000 13.21% 1,025,000 2.20% (72,000) (6.5b %)
Other Intergovernmental 735,330 502,960 (31.60%) 522,981 1 12% 20,021 3 98%
Licenses and Permits 469,716 504,300 736% 492,400 1.06% (11,900) (2.36 %)
Total Revenue $44,045,258 $45,792,599 3.97% $46,590,769 100 00% $798,170 1 74%
Beginning Fund Balance 8,209,787 7,581,188 (7.66 %) 5,722,987 ($1,858,201) (24.51 %)
Total Resources $52,255,045 $53,373,787 2.14% $52,313,756 ($1,060,031) (1 99 %)
*Some Criminal Justice Sales Tax is allocated to the Law and Justice capital Fund (a non - general Government Fun
for capital needs. ( See section N 1b for details.)
111-4
Attachment #3
Property Tax as a Percentage of
Total Fund. Revenue
Year 2005 Budget
100% ,,, ,
90%
' /4/ ,
5/ p ,„
( .././i
50% 97%
40% , ,/a!" 73%
30% 52%
20%
1 11
52 /o
° a
10/0 14%
General Parks Streets Fire
Fund Pension
❑ % Property Tax 0 % Other Revenue
Attachment #4
The largest revenue source for the General Government Funds is sales tax. [Yakima is
right i.n the middle in ranking ot per capita sales tax compared with similar cities in the
State (Refer to Figure 111 -3) However, Yakima is in the lower 1/3 of rankings in all
other revenue comparisons per capital and is the lowest out ot the 12 cities compared in
combined per capita revenue. Yakima's $998 per capita taxes is $574 below the average of
$1,572 based on 2002 actual data, as demonstrated in Figure 8, below The most important
conclusion from this analysis is that the City of Yakima has a very limited revenue /tax base
compared with most cities of its size in the state, and yet provides similar or enhanced
services and programs to its citizens.
Comparable Cities between 25,000 and 85,000 in population
2002 PER CAPITA TOTAL REVENUES
(This inchides state and federal grants, taxes and charges for
$2,500 - services, and excludes debt proceeds_) $2.333
0
Yaku per capita total revenue is $ 998, which is $ 574
$1,907 $1,933 81,947
$2,000 - LESS than the average city per capita revenue of$1,572
$1 745
Y $1,5 $1,501 $1,542
- c; Yakima $998
$1,500 -
G
$1,207 $1,209
F.
$1,037
$1000
o m
$500- • d
U - ?v' 4: aCi 0.
so - x ¢ O a 04
Data Compiled from the State Auditor s Local Government Comparative Statistics
111 -15
Attachment #5
Property Taxes.
The total property taxes paid by property owners within the City of Yakima includes taxes
levied by several governmental entities, the State, School Districts, Special Countywide
voted levies and the City's general and special voter approved levies The percentage of
the total property taxes levied by, and allocated to, each individual governmental entity
will change slightly from year to year The City's portion is generally under 30% of the
total amount collected (Refer to the graph and chart below for how the 2004 property
taxes were allocated between these governmental entities )
Figure II -2
2004 Property Tax Distribution
Emergency Medical
Yakima School District State of WA Schools Services
.35¢ .22a 02'
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?`� `}` -�y t. F�� - ". +S4�k 'R r, 6 .31 �' �' w ' 1 *�
r �'. , i ,.,, -:. _ °r : k " ; ,sa :.'G r ^..... b � Y.S.s / a . a ''L--,7:1'r
�.. y 4
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� G rp y���gyyy„„� � y � " � �`y { y�, a ;gip± f" 4'� � `t � , kr b" F 1'h
SS ' C ' a �1 ' i . 1...1 ,' d 7d. j,,, 77 ��,ti.}` ,, ,, = ii' 1 } ��` ?r i; ` I) s, f 1 }i q
I n RkA k'i,,i 9 ,, .M= h..• .; ., t�as w — q ' a 'd ,.,-, V °' y, ` $1
i'l
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it #; 1 y , fxk 4 ru
' M wi, to � �` "x }fi c c � ?$E%Y 1�&'A {{ � , ' ,, w � j { % 1 f °' ' �1 e �, it
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¢ ,0 fp s a+ ,.,— :�.- 3'**, ere �`� ;V, . , 0 ' ; A
City of Yakima Yakima County
.27' 14'
City of Yakima Property Tax. In 2004, a typical City resident pays approximately $13 34
per thousand of assessed value on property taxes. Only $3 56, or about 27% goes to the
City, with the balance divided between the County, schools, and other special districts.
H-4
f
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the Yakima City Council will conduct
a public hearing on the Ad Valorem Tax and the Bond Levy Taxes
proposed for 2005
Said public hearing will be held Tuesday, November 2, 2004 at 2.00 p.m ,
or as soon thereafter as the matter may be heard, in the Council Chambers
at City Hall, 129 No 2nd Street, Yakima, Washington
All interested persons are invited to attend this public hearing
Dated this 14th Day of October, 2004.
Rita M Anson
Director of Finance & Budget
Please publish October 19, 2004.
Charge to Account 10952
•
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No 6
For Meeting Of 11/2/04
ITEM TITLE Public Hearing and Consideration of Legislation pertaining to Ad
Valorem Taxes to be levied for collection in Fiscal 2005 Year
SUBMITTED BY Dick Zais, City Manager
Rita M. Anson, Finance Director
Curdy Epperson, Financial Services Manager
CONTACT PERSON/TELEPHONE Dick Zais / 575 -6040
Rita M. Anson / 575 -6070
Ray Paolella / 575 -6030
Cindy Epperson / 575 -6070
SUMMARY EXPLANATION
Background
Current law, based on Initiative 747, requires several administrative and legal steps to
establish the property tax levy Your package includes two (2) separate ordinances
Ordinance A and B are management's recommendation for the property tax levy for collection
in 2005 Exhibit I details these calculations
Ordinance purposes are-
Ordinance A identifies Council's intent to authorize an increase in the tax levy over 2004
levels This ordinance requires a simple majority to pass It is required by RCW 84.55 120
This is legally necessary to increase the 2005 tax collections by any amount over 2004 levels
CONTINUED
Resolution Ordinances A, B Other (Specify) Exhibit I , Attachments 1 -5
Funding Source
APPROVED FOR SUBMITTAL
City Manager
STAFF RECOMMENDATION City Management is recommending a 1% increase m the
property tax levy for collection in the year 2005, and that ordinances "A" and "B" be enacted
by the City Council
BOARD /COMMISSION RECOMMENDATION
COUNCIL ACTION (A) Ordinance passed ORDINANCE NO. 2004 -65 (l% annual tax levy)
(B) Ordinance passed ORDINANCE NO 2004 -66 (ad valorem taxes)
Legal /BD
Ordinance B fixes the tax levy for collection by the City in 2005 It is virtually the same as in
previous years' ordinances This ordinance includes not only the regular tax but also special
levy taxes for bond repayments This ordinance complies with RCW 35 33 135 and requires a
simple majority vote to pass
Discussion
The total 2005 City of Yakima recommended property tax levy includes the 101% levy, levies
for voted bond issues, and amounts for annexations and new construction The budget
currently includes an estimated revenue of $13,453,121 for the regular levy, an increase of
$313,277 over the 2004 year -end estimate of $13,139,844 (See Attachment 1) The voted levy
debt is budgeted to be $300,000, a decrease of $13,000 below the 2004 budget of $313,000,
based on scheduled debt service for the 1995 voted Fire bond issue The total operating tax
rate for next year is estimated to be $3 43 per $1,000, down from the 2004 rate of $3 47 (The
statutory limit is $3 60) -- the bond rate is estimated to be $0 078 per $1,000, down from $0 084
in 2004
The passage of Initiative 747 on November 6, 2001 established a new maximum tax levy of
101 % in future years Any increase up to this maximum can be approved by Council — any
levy above 101 % would need a vote of the people to enact. The 1% adjustment will generate
approximately $133,000 in additional property tax resources tor 2005 The 2005 budget was
prepared and balanced assuming the tax levy was estimated at 101 %
In comparison to other economic indices, the 1% increase is less than
• The October 2004 Construction Cost Index - 8 9%
• The June Seattle Consumer Price Index (CPI) (All Urban Consumers) - 1 9%
• The July Implicit Price Deflator stipulated in Ref 47 and Init. 747- 2.38%
• The 2004 increase in assessed valuation over 2003- 2.0%
(because of exemptions and economic constraints)
We believe this modest increase is justified by the following conditions
(1) The Yakima economy continues to be distressed which has resulted m marginal growth
of the City's other critical revenues State - shared revenues continue to decline because
of budget difficulties at the State level Major revenues are demonstrating insignificant
growth. (See Attachment 2)
(2) In response to these economic conditions, the City has exercised responsible budgetary
restraint. City management has not asked for new taxes and has taken necessary cost
reduction measures to maintain essential services starting m 2000, and continuing into
2005 The year 2005 General Government Budget is only 0 4% more than the 2004
amended budget and increased mandated and contractual costs have been offset by
other budget reductions
Legal /BD
(3) The property tax is needed to help meet mandates and contractual obligations,
principally Public Safety pensions /medical costs and the Regional Library's services
Attachment 1 demonstrates the amount of property taxes dedicated to these areas.
(4) In the Street budget, property tax represents nearly 75% of all revenue in this budget.
(see Attachment 3) Investing in maintaining and repaving the City streets has been a
high Council priority for several years
(5) Property tax is also a key revenue source for the Parks and Recreation Division,
representing over 50% of all Parks revenue Parks maintenance, the Senior Center and
Aquatics is supported in part by property tax and the cost to maintain and operate
these facilities increases annually (Also see Attachment 3)
(6) Again this year, the City is not expected to collect the full levy because of higher senior
citizen exemptions, delinquent taxes and other uncollechble accounts For the year
2005, the City is budgeting conservatively and estimating a reduction of up to 4% in
actual collections from the authorized levy offset by a portion of delinquent taxes that
are predicted to be collected
(7) Yakima's per capita property tax ranks $56 below the average of comparable
Washington cities with populations of 25,000 to 85,000 in 2002, the most recent year this
information has been compiled Yakima ranks 9th out of 12 cities in this group
Further, for these same cities, Yakima's total per capita revenue collected from all taxes,
fees and charges is $574 dollars less than the average and ranks 12th out of the 12 cities
Our residents are currently taxed substantially less than other similar size cities and
enjoy a very favorable tax advantage (see Attachments 1 & 4)
(8) The 2005 operating levy results in a slightly lower rate per thousand compared to the
2004 levy -- $3 4718 for 2004 and $3 4309 for 2005 Exhibit I also contains an estimated
calculation of the rate per thousand
(9) Finally, the City's current property tax levy represents only 27% (approximately 1/4) of
the total property taxes paid by City residents The State, local School District levies
and County government receive approximately 3/4 of all property taxes paid (See
Attachment 5)
Accordingly, based upon the above, we believe increasing the property tax to 101% next year
is needed and respectfully request your serious consideration of this proposal
Legal/BD