HomeMy WebLinkAbout2003-070 Annual Property Tax Levy ORDINANCE A
ORDINANCE NO 2003 -70
AN ORDINANCE relating to the annual property tax levy, authorizing an increase in the
City's regular levy from the amount levied the previous year
WHEREAS, RCW 84.55 120 requires a taxing district that collects regular levies to hold
a public hearing on revenue sources for the district's following year's current expense budget,
including consideration of possible increases in property tax revenues, and
WHEREAS, pursuant to RCW 84.55 120 and the City Charter, on November 4, 2003,
upon due and proper legal notice, the Yakima City Council held a public hearing to consider
the City's general government budget, general revenue requirements for the 2004 calendar
year, and the total levy amount pertaining to 2004 revenues from real and personal property
taxes, and
WHEREAS, Section 209 of Referendum Bill 47 (RCW 84.55 120) provides that no
increase in property tax revenue, other than that resulting from the addition of new
construction and improvements to property in any increase in the value of state- assessed
property, may be authorized by a taxing district, except by adoption of a separate ordinance or
resolution, pursuant to notice, specifically authorizing the increase in terms of both dollars and
percentage, and
WHEREAS, the City Council, after the public hearing on November 4, 2003, and after
duly considering all relevant evidence and testimony presented, has determined that 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, m order to discharge the expected expenses
and obligations of the City, and as being necessary and in the best interests of the citizens of
the City of Yakima, and
WHEREAS, the amount of property tax levied for collection in 2003 was $12,935,578 for
general government purposes, and
WHEREAS, the discretionary increase in property tax levied for collection in 2004 shall
be in the amount of $129,356, which is a percentage increase of one percent (1%) from the
previous year; and
WHEREAS, the non - discretionary increases in property tax levied for collection in 2004
can only be estimated due to the absence of final values to be provided by the Yakima County
Assessor, now, therefore,
ORDINANCE A
BE IT ORDAINED BY THE CITY OF YAKIMA.
Section 1 The following increases in the regular property tax levy, over the amount
of the previous year's levy, are hereby authorized to be cumulatively levied for collection in
2004.
A. A discretionary increase of $129,356, which is a percentage increase of
one percent (1%) over the amount levied for collection in 2003, plus
B An estimated increase of $10,433 for recent annexations, plus
C. An estimated increase of $107,176 for new construction and
improvements to property, plus
D An increase authorized by state law for state- assessed property 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
A [EST Place, Mayor
City Clerk
Publication 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 $3.5214 $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 $364,014
2003 Levy for Collection in 2004 $13,182,543
cje 10/30/2003
f
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 r Pensions
$3,834,123 %/ $2,631,937
29 73% 20 40%
/'
2 - ',/......,,,v,'„ , ,...1,/,77 .. . ,
, r�,�� / i fj�j }'i;i % ,r•' / i cif / 'f' }li
. lJF?F F' /./- ' ,r ' { ' ? �'' F ::/.: v'��L��1 Y..� •
' • • ,. iY: ::. }:•.tip e A- : ::::::::• :•:• :• :•:ti• .
rY.
_ • r ti � Library
.` $1,414,107
Streets ' 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 111 -11
October 16, 2003
ATTACHMENT 2
III - b. GENERAL GOVERNMENT CONDITION - Revenue Trends
The City receives revenue from many different sources, some revenue is a \ ailable for
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 (for 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 III -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 $10,850,000 1.02% $10,850,000 24.47% $0 0.00%
Crim. Justice Sales Tax' 307,227 605,000 96.92% 670,000 1.51% $65,000 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 Intergovernmental 957,802 591,312 38.26% 590,212 1.33% (1,100) -0.19%
!Licenses and Permits I 405,8561 396,900 - 2.21 %I 374,900 0.85% (22,000)1 - 5.54 %1
'Total Revenue $42,827,719 $43,556,641 1.70% $44,334,204 100.00% 5777,563 1.79%
Beginning Fund Balance 7,756,731 8,209,787 5.84% 6,031,964 I (52,177,823) - 26.53%
Total Resources $50,584,450 $51,766,428 2.34% $50,366,168 ; ($1,400,260) 2.70%
` SomeCriminal 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 $11
Property Tax $11,519,922
Franchise & Util. Taxes $8,814,500
Charges for Services $4,772,867
State Shared Revenue 111111,971,347 2004 vs. 2003 Est.
Decrease in Total Resources
Fines and Forfeitures $1,566,290 Amount ($1,399,960)
Percent (2.70 %) • Other Taxes $1,465,650 __
Other Revenue $821,516
Transfers from other Funds 11.111 $917 ❑ 2003 Y/E Estimate • 2004 Budget
Other Intergovernmental $590,212
Licenses and Permits n $374,900
Beginning Fund Balance (1) c6.031 964
I
$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000
TB -III 2004 Forecast.doc II14
October 16, 2003
•
ATTACHMENT 3
Property Tax as a Percentage of
Total Fund Revenue
Year 2004 Budget
100% --�
90%
80%
70% :_
60%
50% 97%
40% 79%
30% 52%
j o
20% •
10% 16%
0%
General Parks Streets Fire
Fund Pension
® Property Tax 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
= $400 - PER CAPITA PROPERTY TAXES
0
1 $350 Yakima's per capita property tax is $148, which is $39 LESS $337
c than the average per capita city property tax of $187
0
$275
2 $257
^a $250 -
Yakima $148 $201 $202 $211
$200
F 1 $169
f' $150 - $121 $132
$109
m $100 -
a ti - v
U 3 v ,_a b . •4
$50 a 0 „ R 5 s E o
m p 3
D4 w
so
Data compiled from the State Auditor's Local Government Comparative Statistics - 12/31/01
TB -III 2004 Forecast.doc 111-12
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
yet 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
• $2,500 -
services, and excludes debt proceeds.) $2,282
a
Yakima's per capita total revenue is $1,010, which is $1,991 $2,022
,ad
$2,000 - $504 LESS than the average city per capita revenue of $1,909
ti $1,514.
' $1,530 $1,592
Q $1,500 1 Yakima $1,010 $1,316 $1,406
5
I
$978 $1,062 $1,070
$1,000 -
.2
$500 .6 a -5
v i B 3 S 1 a o
o. 3 a m x u p a a a
$o -
Data compiled from the State Auditor's Local Government Comparative Statistics - 12/31/01
TB -III 2004 Forecast.doc 11I -
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
for how the 2003 property taxes were allocated between these governmental entities )
Figure II -
2003 Property Tax Distribution
Emergency
Medical
Yakima School District State of Washington Schools Services
.32 .23 .02
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City of Yakima Yakima County
28¢ 15¢
T &III 2004 Forecast.doc 11-4
October 17 2003
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No
For Meeting Of 11%x,(03
ITEM TITLE Public Hearing and Consideration of Legislation pertaining to Ad
Valorem Taxes to be levied for collection in Fiscal 2004 Year
i
SUBMITTED BY Dick Zais, City Manager
Rita M. Anson, Finance Director
Cindy 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
m 2004. Exhibit I details these calculations.
Ordinance purposes are:
Ordinance A identifies Council's intent to authorize an increase in the tax levy over 2003
levels. This ordinance requires a simple majority to pass. It is required by RCW 84.55 120
This is legally necessary to increase the 2004 tax collections by any amount over 2003 levels.
CONTINUED
Resolution Ordinances A, B Other (Specify) Exhibit I , Attachments 1 -6
Funding Source
I —1
APPROVED FOR SUBMITTAL. �� >>
City Manager
STAFF RECOMMENDATION City Management is recommending a 1% increase in the
property tax levy be authorized for collection in the year 2004.
BOARD /COMMISSION RECOMMENDATION
COUNCIL ACTION Ordinance passed 4 -1 vote; Puccinelli voting nay.
ORDINANCE NO. 2003 -70
Legal /BD
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 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 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 $12,671,019 (See Attachment 1) The voted levy
debt is budgeted to be $313,000, a decrease of $32,000 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 next year is estimated to be $3.50 per $1,000, slightly less than the 2003 rate of $3 52.
(The statutory limit is $3 60) -- the bond rate is estimated to be $0 08 per $1,000, down from
$0 09 in 2003
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 $129,000 in additional property tax resources for 2004. The 2004 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 November 2003 Construction Cost Index - 3.3%
• The August Seattle Consumer Price Index (CPI) (All Urban Consumers)- 2.15%
• The July Implicit Price Deflator stipulated in Ref 47 and Init. 747 -1.84 %
• The 2003 increase in assessed valuation over 2003 -1.5 %
(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 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 revenues
to show growth for 2003/2004 is the volume added because of the major annexation.
(This annexation also resulted in a similar increase in expenses to adequately serve the
area.) Without estimates for the annexation, 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 in 2000, and continuing into
2004. The year 2004 General Government 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 1 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 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 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, delinquent taxes and other uncollectible accounts. For the year
2004, 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 $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 in 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 prop 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 increasing the property tax to 101% next year
is needed and respectfully request your serious consideration of this proposal.
Legal /BD
Return To:
Yakima City Clerk
129 North Second Street
Yakima, WA 98901
Document Title ORDINANCE NO. 2003-69
(2003 Yakima Urban Area Comprehensive Plan Amendments)
Grantor City of Yakima
Grantee (A) Michael & Francine Dubrule / 4001 Englewood Avenue
(B) Tiger, LLC / 406 North 23` Avenue
(C) Marchal Irwm / vicinity of South 24 Avenue & Racquet Lane
ABREVIATED LEGAL DESCRIPTIONS
(A) The E 103 ft of SE 1/4 of SE % of SW %4 of Section 15, Township 13 N, Range 18,
East W.M., lymg S of ROW of Yakima Valley Canal. EXCEPT road on East & South
(B) Lot 24, Hill Subdivision, recorded m Volume "M" of Plats, Page 2, Records of
Yakima County, Washmgton.
(C) That portion of NE 1/4 of SE IA of NW 1 /4 of Section 35, Township 13 N, Range 18
East W.M. lying N of the centerline of Wide Hollow Creek; (see Exhibit C for
detailed legal description).
Parcel Numbers: (A) 181315 -34022
(B) 181323 -12441
(C) 181335- 24034, 181335- 24035, & 181335- 24036.
II III III 1111 111111 II 7371250
Page 112/2003 62 56P