HomeMy WebLinkAbout2003-071 Ad Valorem Tax ORDINANCE B
ORDINANCE NO 2003 -71
AN ORDINANCE fixing and levying the amount of ad valorem taxes necessary to balance
estimated revenue with estimated expenditures for the 2004 Budget for
the City of Yakima.
WHEREAS, the City Council finds that the total net amount of $13,585,543 m 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 2004 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 $13,585,543 for the following
purposes
General Government Levy
Operating Funds $11,894,328
Firemans' Rehef & Pension Fund 1,378,215
Amount of tax levy for General
Government Purposes (1) $13,272,543
Special Purpose Tax Levy 313,000
Total Levy Amount (1) $13,585,543
(1) Includes an additional $90,000 to provide for final adjustments m 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, 2003
Section 3 Pursuant to Article VI, Section 2 of the Yakima City Charter, this
ordinance shall take effect on November 12, 2003
PASSED BY THE CITY COUNCIL, signed and approved this 12th day of
November, 2003
1 3 A FI EST Mary ace, Mayor
K -- . a�
City Clerk
Pubhcation Date: 11 -14 -2003
Effective Date 11 -12 -2003
EXHIBIT I
City of Yakima
101% Tax Limitation Calculation
2003 TAX 2004
ASSESSED RATE LEVY
VALUES APPLIED DOLLARS
Pnor Year (2003) $3 673,433 781 $3 5214 $12,935,578
1% Increase $129,356
Base 101% $13 064 934
Valuation Increase $56,084 885 N/A $0
New Construction $30 435.560 $3.5214 $107 176
State Assessed Value $3 52I4 $0
101% Tax Limit
Before Annexations $3,759,954.226 $3 5033 $13,172,110
Add for Annexation $2,978 102 $3 5033 $10 433
101% Limit for
Subsequent Years $3 762,932 328 $3 5033 $13 182,543
Plus Contingency $90 000
Total- ordinance $13,272.543
State of Washington
Constitutional Limit
Assessed Valuation $3,762,932 328 $3 6000 $13,546,556
Levy Margin 5364,014
2003 Levy for Collection in 2004 $13,182,543
cue 10/30/2003
ATTACHMENT 1
Property taxes provide for 26% of all General Government revenue, which excludes the
Firemen's Relief and Pension costs The graph below depicts the allocation of the City's
property tax revenues
Figure III - 4
Property Tax Allocation by Function
2004
General Levy
Property Tax Total -- $12,898,137
Fire and Police
General Fund . Pensions
$3,834,123 %/ $2,631,937
29 73% °
2040%
2;2."
/7 /!/ r�/r
J /r ..
+1.2 r //
/ r!.
1
� ;.
• . • Library
- $1,414,107
Streets 1 10 96%
$3,185,644
24 70%
Parks
_ $1,832,326
14.21%
TABLE III -5
2004 PROPOSED
GENERAL PROPERTY TAX LEVY
2003 2004 2003
2002 Year -End Budget vs.
Actual Estimate Projection 2004
General / Police Pension $ 4,177,475 $ 4,887,869 $ 5,087,845 4.1% (1)
Library 1,245,211 1,400,115 1,414,107 1 0%
Parks & Recreation 1,726 790 1,832,326 1,832,326 0 0%
Streets /Traffic 2,963,180 3,185,644 3,185,644 0 0%
Sub - Total -- Gen. Gov't. $10,112,656 $11,305,954 $11,519,922 1 9%
Firemen's Relief and Pension 1,289,280 1,365,065 1,378,215 1 0%
Total $11,401,936 $12,671,019 $12,898,137 1 8%
( Of this increase, 2.5% is dedicated to Police Pension increases (see earlier discussion)
TB -III 2004 Forecast.doc III -11
October 16, 2003
ATTACHMENT 2
III - b GENERAL GOVERNMENT CONDITION - Revenue Trends
The City receives revenue from mangy different sources, some revenue is available tor
any government purpose and some revenue is restricted in use to a specific tund(s)
and/ or a specific purpose The sources of revenue that are available for use within the
General Government Funds (tor general purposes or for a restricted purpose within
General Fund, Parks or Street Funds) are listed in Figure III -1 below along with a three
year comparison of the amount of revenue received from each source (Table I1I -4)
General Government Three Year Companson TABLE III -4
2004 vs 2003
2002 2003 Percent 2004 ! % of Increase Percent
Source Actual Estimate Change Budget 2004 Total (Decrease) Change
General Sales Tax $10,740,603 510,850,000 1.02% 510,850,000 24.47% $0 0.00%
Crim. Justice Sales Tax` 307,227 605,000 96.92% 670,000 1.51% 565,000 10.74%
Property Tax 10,112,656 11,305,954 11.80% 11,519,922 25.98% 213,968 1.89%
Franchise & Util. Taxes 8,734,721 8,451,941 3.24% 8,814,500 19.88% 362,559 4.29%
Charges for Services 4,497,670 4,577,574 1.78% 4,772,867 10.77% 195,293 4.27%
State Shared Revenue 2,366,988 2,162,458 -8.64% 1,971,347 4.45% (191,111) -8.84%
Fines and Forfeitures 1,631,877 1,477,990 -9 43% 1,566,290 3.53% 88,300 5 97%
Other Taxes 1,360,051 1,433,650 5 41% 1,465,650 3.31% 32,000 2.23%
Other Revenue 808,093 764,162 5.44% 821,516 1.85% 57,354 7.51%
Transfers from other Funds 904,175 939,700 3.93% 917,000 2.07% (22,700) 2.42%
Other Intergovemmental 957,802 591,312 38.26% 590,212 1.33% (1,100) -0.19%
(Licenses and Permits I 405,856 396,900 2.21 %1 374,900 0.85 %1 (22,000)1 5.54%
(Total Revenue 542,827,719 543,556,641 1.70% 544,334,204 100.00% 5777,563 1.79%
Beginning Fund Balance 7,756,731 8,209,787 5.84% 6,031,9641 ($2,177,823) 26.53%
Total Resources 550,584,450 551,766,428 2.34% 550,366,168 j (S1,400,260) 2.70%
SomeCnminal Justice Sales Tax is allocated to the Law and Justice capital Fund (a non - general
Government Fund) for capital needs. ( See section IV lb for details.)
2003 Year -End Estimate and Year 2004 Budget Figure III -1
General Government Resources
Sales Tax /Crim. Justice Sales Tax '. - '' -, ' '-, ..., . , -, . :.gin ; ::;- 511,520,000
Property Tax $11,5]9,922
Franchise & Util. Taxes ilimaimmanagmeassecammE $8,814,500
Charges for Services IIEMIEEMIMMEBMESMM9i $4,772,867
State Shared Revenue 1,971,347 2004 vs. 2003 Est.
Decrease in Total Resources
Fines and Forfeitures $1,566 290 Amount (51,399,960)
Percent (2.70 %)
Other Taxes 51,465,650
Other Revenue 11E1 5821,516 —
Transfers from other Funds PEI $917 0 2003 Y/E Estimate • 2004 Budget
Other Intergovernmental •® $590,212
Licenses and Permits n $374,900
Beginning Fund Balance (1) ' '^ :." .,',: 56.031.964
$0 52,000,000 54,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000
TB -IIl 2004 Forecast.doc III-4
October 16, 2003
ATTACHMENT 3
Property Tax as a Percentage of
Total Fund Revenue
Year 2004 Budget
90%
■
o
80 / /o
70%
y ■
. : 50% 97%
40% 79% .
30%
■
4
o
20/0 ,
10% 16%
_:
General Parks Streets Fire
Fund Pension
IS Property Tax r., Other Revenue
ATTACHMENT 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 2001 (the last year
information has been compiled) It shows the City of Yakima's property tax per capita
is $148, which is $39 less than the average of all the comparable cities Yakima ranks
fifth 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
5400 - PER CAPITA PROPERTY TAXES
0
$350 Yakima's per capita property tax is $148 which is $39 LESS 5337
than the average per capita city property tax of $187
V
s • 5300 $275
o
-c
$257
c $250 -
E Yakima $148 $201 $202 S211
13 g $200 I $169
F
d 5150 - $121 $132
Q $109
R 5100
1 u
A ro
r, -5 L A
c 550 0 ° c c a o 0
rj
Data compiled from the State Auditor's Local Government Comparative Statistics - 12/31/01
TB -III 2004 Forecast.doc II1 -12
October 17 2003
ATTACHMENT 5
The largest revenue source for the General Government Funds is sales tax Yakima is
right in the middle in ranking of per capita sales tax compared with similar cities in the
State (Refer to Figure III - However, Yakima is in the lower 1/3 of rankings in all
other revenue comparisons per capita and is the second lowest out of the 12 cities
compared in combined per capita revenue Yakima's $1,010 per capita taxes is $504
below the average of $1,514 based on 2001 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
vet provides similar or enhanced services and programs to its citizens It should be
noted that when the Auditor's Office releases new figures for 2002, Yakima's position
could slip further as a function of higher population figures and stagnant revenue
growth.
Figure III - 8
Comparable Cities between 25,000 and 85,000 in population
PER CAPITA TOTAL REVENUES
o (This includes state and federal grants, taxes and charges for
52,500 1 services, and excludes debt proceeds.) $2,282
o
Yakima's per capita total revenue is $1,010, which is 51,991 52
O 52,000 - $504 LESS than the average city per capita revenue of 51,909
$1,514.
' $1,530 $1,592
P $1- _ Yakima $1 51,316 $1,406
o
5978 1
51,062 51,070
A 51,000 -
3
F
• $500 - v g
74 e
R
c s v y
°' 1 u 3 m o x
Data compiled from the State Auditor's Local Government Comparative Statistics - 12/31/01
TB -II1 2004 Forecast.doc 111 -21
October 17 2003
ATTACHMENT 6
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
tor how the 2003 property taxes were allocated between these governmental entities )
Figure II -2
2003 Property Tax Distribution
Emergency
Medical
Yakima School District State of Washington Schools Services
.32 .23 .02
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: ' / A22123565 A
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I
City of Yakima Yakima County
28a 15't
TB-III 2004 Forecast.doc 11-4
October 17 2003
'
B
USINESS::OF THE CITY COUNCIL
Y'AKIMA,. WASHINGTON Y �.
',,,a. '` NT,',, \
AGENDA ST'ATEMEy ' ` i
Item No . .. :,,. ' „,
For'Meetin 'Of ,..1114/03 , ,.
+ Y z ' ' , ' .
ITEM T_ ITLE , , P He_ acing and Consideratron -of Legislation p ert a u i ng to Ad � ' ,.
, ' I ,i , , , 1 ' ';'•;„ W }, 4 .' + I `( " 1 A fl 1 J.
-0- , ,, ' Valorem Taxes t o be levied for c in F iscal 2004 Year k ; 5' , ; ' ',
. BY Dick Zais, City 'Manag e r �f
1, ; Rita M Ans onj',Finance Direetor °` ` `,; '
t "
' , ' ; :` ; N , Cindy Epperson,; ` Fin ancial '' Services M anager r ,, ;, ;' '' , ,
.,� it ., '• ., 1. h 1: ,� - I, '1 , .11.
CONTACT , PERSON/TELEPHONE D ickrZ a is / 575 6040' y „. ' r ' } ,,,,, ,,
,r, l,t' is- . +. i.' , ,J., ,. .%+.�.f• r 1 s4 Y 6 , hf , f. 1 d' i :IJ
, . , Rita N il A nson / 575 4,6070' , ' ,
4' 0 -' ' Ray Paolel / 57 5 - 603 „ , S L ,. .,, : ` ;' •
Cin E erson °'57, 5 -6070 !
1 1 y . pp
SU EXPLANATION - ' . ` ' ` °` '
t fi q t M . A '1, , " ' . :t '71 !,� <t,; ' '4.:%;,",,,,, ,, , n; A, , ' r,.,
Background ,, ., ' 'a ,r r ` ' ,
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C
nitiative 74 7, re u several' . ,, g e ps't o t , 4 r , rren f� law ' Rba s ed,on I a q i adm and a le al st
establi th levy Your ackage includes two (2) separateYordulances 0 ;"' ,1 " .
s w ' }' . ' 4 . -,O r s 1, ' ' r' '� d, d ; , -, t `''.
O r d inance A and B are ,managem r ec om me n _ da • " prope rty t l e M' vy fo r co ,
19 , .' ' < a N . a; Ki ?, i ,r ' , 0'4 2 i " , ' , r
in ° 2004: Exh I d etail s ' the s e c alc u l ati on ' s. , , e' „ ;11 '1'..„'A
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I , „Ordinance A id Council's i tot a an i '
ncrease'm t -tax l e vy c o v er 20 `
1 ,J,"� M
rev Thi +, s o , re qu i re s a s imple ' , m to . pas s e It is req ' b y RCW r 84:55
a t J. , •� - CIS 4" h t Y .
' « , ' 'This i's' legally necessary'to h inreae
c the 20 0 4 ' t+
A' tax rc o l l e c 2 tio ns b an y a mount o ver 2003 l ev el s J ' I1 , ,
+ ,1 ,, y, l u, • ti a � ' ,' , M 1: at, ,2,11, , M . '' ¢ 17i,C :,yn`t 'r, ,,, Y;." , A- ; I; `'1
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Resolution ''Ordinances` A, B her- (Specifyy) E x hibit 1 " :, At 1 -6 "' r 11 l , , 4 , •
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' APPROVED FOR SUBMITTAL. .,' '. >> i;: ',,1 ,, , ' , , " 4 `r` ' ,_ ! Ht
.y +,,. , :cit y , Mari e r + cl' ,, jl, „ f.
, •
i
STAFF RECOMMEN Ci Management is recommendng a 1 V,mcreasesm the ' ' '
r,,,, ` ' r er tax` le be authorized for i n the. ea r `20 04 4: 3[ ' �,
P P t �3' year 4,
,,,,',,f, , y'� ''io dr. ,,, '> .a; p , 'V .11r ,
BOARD / COMMISSION ` Y ` :,
1 - , ,
„ ., COUNCIL ACTION •ordinance passed' 4;1 vote', Piuecinellli voting 'nay.,
O RDINANCE NO. .2003 - 71
. ;,.;'.1
: +' LegaUBD `
Ordinance B fixes the tax levy for collection by the City in 2004. It is virtually the same as m
previous years' ordinances. This ordinance mCludes,not,only the regular tax but also special
levy taxes for bond repaymeritS. This Ordinance Complies with RCW 35:33 135 and requires a )
simple Majority vote to pass.
Discussion
The total 2004 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 ,$12,898,137 for the regular levy, an increase of
$227,118 over the 2003 year-end estimate of :$0,671,019 ' (See Attachment 1) The voted levy
debt is budgeted to be ,'$3.1,000; , d=c 1 000a of 02000 below the 2003 budget of $345,000,
based on scheduled debt service for the 1995 voted Fire bond iSsue. The total 'operating tax
rate for year is 'estiinated to be,S3.50 per $1,000, :slightly less than the 2003 rate of $3.52.'
,
(The statutory limit is $3 60) 1-- the bond rate is , estimated to be '$0 08 per $1,000, :down from
$0:09 in 2003
.
The 'passage of 40040e 747 on November 6, WO' estatiliShed 'a new maximum 'tax levy of
,., ,
im '3/. in future years. Any increase up to this maximum can be approved by Council any
'
levy above 401% would need a Voteof, people to 'enact' The 1% adjustment will generate
' approximately $129,000 m additional property tax: resources for 2004. The '2004 budget was
prepared and balanced assuming the tax levy wa ,estin at 101% ,
b ; ,
In comparison tOothereconomic indices; the 1% intreaSe is less than:'
)
1 .., 1` ,
■ i
41 The November 2003 Construction Cost Index - 3:3%
,
• Th August .eatt:lq'Consumer Price Index (GPI) (All Urban Consumers)- 2.15%
• The ,July Implicit Price Deflator stipulated m Ref 47 and Init.' 747- 1.84% '
' • The '2003 increase in assessedyalUation'over ,2003- 1:5%
'(because of exemptions and eCOnOrnie constraints)
We believe this is justified by the 'fOlkAnTirig conditions:'
(1) The Yakima economy continues tO be which has. resulted in Marginal' growth.
of the City's other critiCal, revenues. 'State-Shared revenues continue to decline because
of budget difficulties at the State level. The only factor that caused most other reyenues: ,
to show growth for 2003/2004 is the volume added because of the inajOr
'( annexation also ,resulted in a Similari,pereasein expenses to adequately ,serve the
area.) Without estimates for the annexation, Major revenues are demonstrating
insignificant ;growth. (See AttaChinent 2)
(2) In response to these economic conditions, the City has exercised responsible budgetary
restraint. Cit man has not asked for new taxes and has taken necessary cost
reduction measures to maintain'eSsential services starting in 2000, and continuing ;into
2004. the year 2001 General ‘Goyerrunent Budget has actually been restrained below
the 2003 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
Increases m medical costs for LEOFF I retirees alone will consume more than the 1%
property tax increase
(4) In the Street budget, property tax represents nearly 75% of all revenue in this budget.
(see Attachment 3) Investing m 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 m 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, delmquent taxes and other uncollectible accounts For the year
2004, the City is budgeting conservatively and estimating a reduction of up to 4% m
actual collections from the authorized levy offset by a portion of delmquent taxes that
are predicted to be collected
(7) Yakima's per capita property tax ranks $39 below the average of comparable
Washington cities with populations of 25,000 to 85,000 in 2001, the most recent year this
information has been compiled Yakima ranks 8th out of 12 cities m this group
Further, for these same cities, Yakima's total per capita revenue collected from all taxes,
fees and charges is $504 dollars less than the average and ranks 11th 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 4 & 5)
(8) The 2004 operating levy is virtually the same rate per thousand as the 2003 levy --
$3 5214 for 2003 and $3.5033 for 2004. Exhibit I also contains an estimated calculation
of the rate per thousand
(9) Finally, the City's current property tax levy represents only 28% (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 6)
Accordingly, based upon the above, we believe mcreasmg the property tax to 101 % next year
is needed and respectfully request your serious consideration of this proposal
Legal /BD