HomeMy WebLinkAbout1998-050 Valorem Tax • •
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ORDINANCE C
ORDINANCE NO. 98 5.0
AN ORDINANCE fixing and levying the amount of ad valorem taxes necessary to balance
estimated revenue with estimated expenditures for the 1999 Budget for
the .City of Yakima.
WHEREAS, the City Council finds that the total net amount of $11,246,711 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 1999 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 $11,246,711 for the following
purposes: -
General Government Levy
Operating Funds $8,754,779
Fireman' Relief & Pension Fund 1,191,932
Amount of tax levy for General
Government Purposes (1) $9,946,711
Special Purpose Tax Levy 1999 1,300,000
Total Levy Amount (1) 11,246,711
(1) Includes an additional $50,000 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 13, 1998.
Section 3. Pursuant to Article VI, Section 2 of the Yakima City Charter, this
ordinance shall take effect on November 4, 1998.
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(Ik)ord /ad valorem taxes 98 /rlp
PASSED BY THE CITY COUNCIL, signed and approved this 3 day of November,
1998. � ---- -�
ATTEST: John Puccinelli, Mayor
K ,_ 2 4-6)- .eit.a
City Clerk
Publication Date: ) [ -"62 'q?
Effective Date: )) - -q8P
(lk)ord /ad valorem taxes 98 /rlp
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EXHIBIT I
City of Yakima
106% Tax Limitation Calculation
, 1998 TAX 1999
ASSESSED RATE LEVY .
VALUES APPLIED DOLLARS
Prior Year (1998) $2,792,000.801 $3.2869 $9,176,934
6.0% Increase
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$550,616
Base 106% $9,727,550
Valuation Increase $12,961.721 N/A $0
New Construction $34,900.430 $3.2869 $114,714
State Assessed Value $3.2869 $0
106% Tax Limit
Before Annexations $2,839,862.952 $3.4658 $9,842,264
Add for Annexation $15,710.000 $3.4658 $54,447
106% Limit for
Subsequent Years $2,855,572.952 $3.4658 $9,896,711
State of Washington
Constitutional Limit
Assessed Valuation $2,855,572.952 $3.6000 $10,280,063
Levy Margin $383,351
1999 Levy $9,896,711
Plus contingency for final adjustments $50,000
General Purpose Levy (as included in Ordinance C) $9,946,711
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Page 1 cje 10/29/98
EXHIBIT I
City of Yakima
Referendum 47 Tax Limitation Calculation
1998 TAX 1999
ASSESSED RATE LEVY
VALUES APPLIED DOLLARS
Prior Year (1998) $2,792,000.801 $3.2869 $9,176,934
.85% Increase $78,004
Base 100.85% $9,254,938
Valuation Increase $12,961.721 N/A $0
New Construction $34,900.430 $3.2869 $114,714
State Assessed Value $3.2869 $0
Ref. 47 Tax Limit
Before Annexations $2,839,862.952 $3.2993 $9,369,652
Add for Annexation $15,710.000 $3.2993 $51,833
Ref 49 Limit for
Subsequent Years $2,855,572.952 $3.2993 $9,421,485
State of Washington
Constitutional Limit
Assessed Valuation $2,855,572.952 $3.6000 $10,280,063
Levy Margin $858,578
1999 Levy $9,421,485
Page 2 cje 10/29/98
ATTACHMENT 1
City of Yakima
Property Tax Estimate
1999 Forecast and Preliminary Budget
• 1999 % 1999 Estimate % loss from
98 Budget Forecast inc. Ref 47 inc. Ref 47
General Fund 2,506,628 2,914,841 16.3% 2,610,221 4.1% (304,620)
Library 1,117,096 1,149,995 2.9% 1,116,747 0.0% (33,248)
Parks 1,638,865 1,688,031 3.0% 1,638,353 0.0% (49,678)
Streets 2,766,318 2,849,308 3.0% 2,765,455 0.0% (83,853)
Subtotal Gen Govt . 8,028,907 8,602,175 7.1% 8,130,776 1.3% (471,399)
Fire Pension 1,124,464 1,191,932. 6.0% 1,191,932 6.0% -
9,153,371 9,794,107 7:0% 9,322,708 1.9% (471,399)
Total Calculated Levy 9,896,711 8.1% 9,421,485 2.9% (475,226)
Difference from Budget 102,604 98,777 (3,827)
At the time of preparing for the 1999 Forecast Budget, Yakima
County had not yet provided assessed valuation information
because of a computer software malfunction. New construction and
annexation was conservatively estimated to be 1 %. Normally, the
information from'the County would be used in the Preliminary '
Budget, but the information was received too late to incorporate and
still maintain the document production timeline. The final budget
will be adjusted to the Calculated Levy.
ATTACHMENT 2
II. REVENUE AND EXPENDITURE TRENDS FOR 1999 GENERAL
GOVERNMENT FUNDS
A. General Government Resources - Major Categories
1. Property Tax
The 1999 Operating Levy which provides for basic services such as Police, Fire, Streets,
Parks, etc. is expected to increase by $640,736 to $9,794,107 or 7.0% above the 1998 levy
as explained below. Subject to the 106% limit, plus initial property taxes on new
construction and annexed areas, the increase in the amount of property taxes the City
will be allowed to levy for basic services during the 1999 tax year is at this juncture
' limited to $640,736. The City of Yakima portion of property taxes on properties within
the City, for City, County, State and other special purpose levies, approximates 20% or
1/5 of the total collected. (See Exhibit IV.)
As noted before, the General Purpose Property Tax revenue source is now limited to the
increase to 6% or the Implicit Price Deflator Index (IPD) (.85 %), whichever is lower, plus
new construction unless the Council, by super majority vote (5 -2), chooses to maintain
the 6% increase and finds substantial need to support the change. If the IPD is used, the
tax resources available to the City could be reduced by $472,000 for 1999, which would
necessitate reducing service in those services directly receiving property tax as a major
funding source -- General Government (General Fund, Parks and Streets), Public Safety
Pensions, and Intergovernmental (Library). The following chart illustrates the impact of
the proposed tax limitation referendum.
'99
General Forecast Ref. 47 Loss from
Government 1998 1999 vs. '98 Effect of vs. '98 Forecast
Property Tax Levy Budget Forecast Budget Ref. 47 Budget
General Fund $2,506,628 $2,914,841 16.3% $2,610,221 4.1% $(304,620)
Library 1,117,096 1,149,995 3.0% 1,116,747 0.0% (33,248)
Parks & Recreation. 1,638,865 1,688,031 3.0% 1,638,353 0.0% (49,678)
Streets & Traffic 2,766,318 2,849,308 3.0% 2,765,455 0.0% (83,853)
Fire Relief & Pension 1,124,464 1,191,932 6.0% 1,191,932 6.0% 0
$9,153,371 $9,794,107 7.0% $9,322,708 1.9% $(471,339)
Property Tax Increase
1998 vs. 1999
$9,900,000 ; $9,794,107 Reduction in Property Tax
$9,700,000 ' / //f if Ref. 47 level is
adopted = $471,399
$9,500,000 $9,322,708
$9,300, $9,153,371
$9,100,000
$8,900,000
$8,700,000 +- 1 i
1998 Levy Budgeted -7% Ref 47 -1.85%
T &III 1999 Forecast 18
10/1/98
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ATTACHMENT 3
Figure 1 illustrates how the City's Operating Levy moved from being capped by the
$3.60 per thousand limit to the 6% limit in 1994, when the assessor performed a major
revaluation.
'Property Tax Analysis!
Figure 1
10,000,000 -
9,000,000 -`
Actual Operating Tax Levy
8,000,000 --
7,000,000 —
6,000,000 —
5,000,000 - - -
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4,000,000 — $3.60 Per Thousand- Maximum Permissable Levy
3;000,000 —
2,000,000 —
9E ----®
1,000,000 — Assessed Value (000,$)
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
The following table outlines the allocation of the General Property Tax Levy.
TABLE V
1998 1999 1998 Levy
1997 1998 Estimated Estimated vs.
Actual Levy Actual Levy 1997 Levy
General $2,362,740 $2,506,628 $2,506,628 $2,914,842 16.3%
Library 1,053,863 1,117,096 1,117,096 1,149,995 3.0
Parks 1,546,099 1,638,865 1,638,865 1,688,031 3.0
Streets /Traffic 2,202,070 2,766,318 2,766,318 2,849,308 3.0
Sub - Total -- Gen.
Gen. Gov't. $7,164,772 $8,028,907 $8,028,907 $8,602,176 7.1%
FRP 974,340 1,124,464 1,124,464 1,191,932 6.0
Total $8,139,112 $9,153,371 $9,153,371 $9,794,108 7.0% .
Property taxes provide for 22.1% of all General Government revenue. The graph below
depicts the relationship of property tax availability for general operations versus the
dependence on property tax for Police and Fire Pension expenditures.
T B-III 1999 Forecast - 19
10/1/98
ATTACHMENT 4
Property Tax Allocation by Function Figure 2
1998 General Levy
Property Tax Total— $9,153,371
Fire and Police •
General Fund Pensions
$1,809,633 $2,297,140
18.48% °
23.45/°
. r.}{.
;i'Vree:pc:,:.;.• -
ti
, :.......— : 1 :-*.. k
r. • ;� • r Library
• • • , f., 1; , $1,149,995
Streets • • J: 11.74%
$2,849,308 •
29.09%
arks
. _ $1,688,031
17.24%
Figure 3
PROPERTY TAX ALLOCATION
Increase from 1989 to 1999
(Percentage and Total Dollars)
, /
Fire & Police // / f�l / / / /�� / / / / / / / /// °
Pensions 138.4 b
/ / / / / / / / / / / / / ///
All Other $3,667,537 93.4%
i I I I I I I
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0%
TB-III 1999 Forecast 20
10/1/98
ATTACHMENT 5
The City has compiled data from the State Auditor's Office which identifies per capita
property tax for comparable sized cities throughout the State. The following, chart.
compares the City's per capita property tax income for 1995 (the last year information
has been compiled). It shows the City of Yakima's property tax per capita is $121;
which is $67 less than average per capita. Yakima ranks second lowest in tax per
capita of the 14 cities.
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The City of Yakima's property tax revenues are less than the average for the rest of the
cities due to lower market valuation of property, senior citizen tax relief, and
agricultural tax relief, etc.
MUNICIPAL BENCHMARK COMPARISONS -- 36,000 - 189,000 POPULATION
PER CAPITA PROPERTY TAXES
(rounded to the
closest dollar)
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$350 —
$317
$300 _ City Property Tax Average is $188- -
$304
or $67 (per thousand dollars of $278 $28 _e
assessed valuation) MORE than the —
$250 — City of Yakima. $247
$219 $_�
Yakima
$200 — $188
$154 $159 $163 $166
$150 — / —
$117 $121
$100
u �
$50 t° > v s 5 .� 'a
z 0 8 .� c °' > v o
cteJ $0 a �' w a a`'4'
Data compiled from the State Auditor's Local Government Comparative Statistics -12/31 /95.
ATTACHMENT 6
The chart below on Combined Per Capita Tax Revenues shows that Yakima ranks 3rd
from the lowest of 14 comparable cities in the State at $444 per capita taxes or $96
below the average of $540 based on 1995 actual data. The most important conclusion
from this anal sis is that Ci of Yakima businesses and residents en'o a si . nificant
advantage in their per capita tax compared to other comparable Washington cities.
Moreover, Yakima's competitive economic position in the regional economy of the
State is • reatl enhanced b this lower . er ca . ita tax level.
MUNICIPAL BENCHMARK COMPARISONS -- 36,000 - 139,000 POPULATION
PER CAPITA COMBINED REVENUE
(rounded to the closest dollar)
The City average per capita revenue is $540 -
900 which is $96 MORE than the City of Yakima. $ 863
800 $ $783 $785 $803
700 Yakima $669 600 $584
$539 --
500 $485 $490 ��
�/� $400
$421 $444 $448
400
. 11110111110
300
ma ■..1313 - .
0111301111 0.013
200 E
V
3 a D c R G Q C a
100 8 it :; c , o c =
Data compiled from the State Auditor's Local Government Comparative Statistics -12/31 /95.
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ATTACHMENT 7
City of Yakima .
General Fund Resources -1999 Budget
Actual Amended Estimated Adopted 98 vs '97
Receipts Budget Receipts Budget Budget
1997 1998 1998 1999 Change
TAXES
Real and Personal Property Tax $3,416,603 $3,623,724 $3,623,724 $4,064,837 12.2%
Criminal Justice Sales Tax 497,062 500,000 500,000 510,000 2.0%
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Retail Sales & Use Tax 10,373,741 10,704,000 10,530,000 10,634,000 -0.7%
Franchise Fees
Nob Hill Water Association 11,628 12,000 11,500 12,000 0.0%
Natural Gas 214,805 210,000 215,917 216,000 2.9%
Total Franchise Fees $226,433 $222,000 $227,417 $228,000 2.7%
Utility Tax
Pacific Power & Light $2,016,530 $2,050,000 $2,000,000 $2,025,000 -1.2%
Nob Hill Water Assn. 81,987 85,000 82,000 82,000 -3.5%
Natural Gas 401,507 408,100 380,000 390,000 -4.4%
Valley Disposal 277,540 250,000 250,000 - 250,000 0.0%
Cellular Telephone 677,395 875,080 895,000 950,000 8.6%
Telephone 1,216,898 1,237,780 1,237,780 '1,280,000 3.4%
City Water Utility 553,771 537,880 604,198 600,000 11.5%
City Sewer Utility • 978,876 966,064 1,000,000 1,029,210 6.5%
City of Yakima Refuse 230,865 237,120 244,000 254,000 7.1%
Sewer Septage 104 500 500 500 0.0%
Total Utility Tax $6,435,473 $6,647,524 $6,693,478 $6,860,710 3.2%
Business License Tax 463,574 470,000 470,000 470,000 0.0%
Gambling Excise Tax 468,739 430,000 450,000 400,000 -7.0%
Leasehold Excise Tax 692 575 650 650 13.0%
Total Taxes $21,882,317 $22,597,823 $22,495,269 $23,168,197 2.5%
LICENSES AND PERMITS
Regulatory Business Licenses $16,973 $14,000 $14,000 $14,000 0.0%
Amusements 3,481 3,500 3,000 3,100 -11.4%
Penalties on Business Licenses 4,183 4,200 10,500 4,200 0.0%
Gun Permits 10,746 10,000 10,000 10,500 5.0%
Building Permits 378,861 250,000 300,000 265,000 6.0%
Building Code Inspections -- Selah 62,119 50,000 40,000 0 - 100.0%
Fireworks Display Permits 0 50 50 50 0.0%
Mechanical Permits 25,904 20,000 16,000 16,000 -20.0%
Plumbing Permits 40,081 38,000 38,000 38,000 0.0%
Sign Permits 7,893 7,000 7,000 7,000 0.0%
Penalty on Infraction 90 180
Environmental Impact Permits 2,431 2,500 2,500 2,500 0.0%
Dangerous Dog Registration Fee 0 100 0 0 - 100.0%
Dog Licenses 30,696 30,000 34,000 30,000 0.0%
Dog License Penalties 2,460 1,500 2,300 2,000 33.3%
Right -of -Way Use Permits 2,100 2,000 1,500 1,500 -25.0%
Total Licenses and Permits $588,018 $432,850 $479,030 $393,850 -9.0%
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City of Yakima
General Fund Resources -1999 Budget
Actual Amended Estimated Adopted 98 vs '97
Receipts Budget Receipts Budget Budget •
1997 1998 1998 1999 Change
INTERGOVERNMENTAL REVENUE
Law Enforcement Block Grant $77,892 - $14,092 $60,166
Cops Ahead Program 48,862 75,000 75,000 48,000 -36.0%
Criminal Alien Grant 45,358 67,518
Mobile Home /Camper Excise Tax 17,914 17,800 18,000 18,000 1.1%
Motor Vehicle Excise Tax 770,490 780,000 805,000 845,000 8.3%
Criminal Justice - High Crime 525,840 465,000 416,000 400,000 - 14.0%
Criminal Justice - Population /Violent Crime • 86,279 76,700 90,000 90,000 17.3%
Criminal Justice - Grants 84,416 84,300 84,300 88,861 5.4%
Sales Tax Equalization
Liquor Excise Tax 188,864 188,000 195,000 200,000 6.4%
Liquor Board Profits 354,296 330,000 410,000 425,000 28.8%
DARE Program School Dist. #7 9,246 0
Housing In -Lieu Tax 5,264 5,264 5,264 5,264
Drug Enforcement Agency 11,559 8,000 8,200 8,000 0.0%
Resource Officers 164,855 171,854 171,349 0 - 100.0°%
Fire Protection Charge - Fairgrounds 26,000 28,000 26,000 26,000 -7.1%
Fire /EMS Services for District #10 71,086 75,000 70,000 35,000 - 53.3%
Fire Protection Charge -State Facilities 27,219 15,000 15,000 15,000 0.0%
Fire Training Center 8,000 35,000
Fire Training Services 20,075 14,053 20,000 20,000 42.3%
Codes -Fire Inspection Services 315
County Share of Hearings Examiner 11,572 20,000 2,475 0 - 100.0%
Total Intergovernmental Revenue $2,502,044 $2,353,971 $2,450,854 $2,386,809 1.4%
Ciiy of Yakima
• General Fund Resources -1999 Budget
Actual Amended Estimated Adopted 98 vs '97
Receipts Budget Receipts Budget Budget
1997 1998 1998 1999 Change '
CHARGES FOR SERVICES
Accident Reports - Police $8,840 $9,000 $9,000 $9,000 0.0%
Fingerprints 8,232 8,000 8,000 8,000 , 0.0%
Miscellaneous Police Services 1,966 2,000 2,000 2,000 0.0%
Verification Letters 2,965 3,000 3,000 3,000 0.0%
Vending Machine Revenue - Jail 10,786 10,000 8,000 8,500 -15.0%
Photostat - Fire 396 500 500 500 0.0%
Sale of Maps -- Codes 1,056 800 900 900 12.5%
Examinations -- Codes 110 75 80 80 6.7%
Sale of Maps & Publications - Planning 1,721 2,800 2,800 2,800 0.0%
Sale of Maps & Publications - Engineering 21 100 0 0 - 100.0%
Sale of Plans & Specifications - Engineering 16,884 5,000 5,000 5,000 0.0%
Engineering OUA Fees 2,019 2,200 100 100 -95.5%
Sale of Publications -- Licensing 879 400 600 400 0.0%
Examinations - Human Resources 8,445 10,000 7,140 8,000 -20.0%
Office Supplies Revenue 44,496 40,000 40,000 40,000 0.0%
Print Shop - Outside Billings 2,998 3,000 3,000 1,500 - 50.0%
Sale of Codes and Publications - Clerk 230 300 986 300 0.0%
City Jail Inmate - Medical Cost Sharing 1,511 2,000 2,000 2,000 0.0%
Police Overtime Reimbursements 26,601 26,601 28,729 8.0%
Polygraph Testing 250 500 0 0 - 100.0%
Fire Training Services 1,500
Probation Service Charges 167,152 250,000 425,000 450,000 80.0%
Probation Day Detention Charges , 2,670 109,200 20,000 40,000 -63.4%
Probation Home Detention Charges 63,349 100,497 85,000 100,000 -0.5%
Fire Alarm Permit 200 100 300 200 100.0%
Dog Impound Fine 5,065 4,000 5,000 5,000 25.0%
Engineering (Contractors) 111,876 . 65,000 90,000 65,000 0.0%
Wastewater Connection Charges 275 250 600 500 100.0%
Plan Checking Fees 147,159 150,000 110,000 110,000 - 26.7%
Zoning and Subdivision Fees 34,864 30,000 35,000 35,000 16.7%
Engineering (City Projects) 296,196 200,000 300,000 240,000 20.0%
Interfund Charges - Data Processing . • 10,000 15,000 15,000 15,000 0.0%
Interfund Charges - Customer Services 554,374 572,196 578,232 654,689 14.4%
Print Shop Revenues 143,873 135,000 140,000 144,000 6.7%
• City Services 1,358,134 1,400,311 1,400,311 1,471,460 5.1%
Total Charges for Services $3,010,492 $3,157,830 $3,324,150 $3,451,658 9.3%
City of Yakima
• General Fund Resources -1999 Budget
Actual Amended Estimated Adopted 98 vs '97
Receipts Budget Receipts Budget Budget
1997 1998 1998 1999 Change
FINES AND FORFEITURES
Municipal Court Infraction Pernalties $334,799 $500,000 $430,000 . $500,000 0.0%
Traffic Infraction Penalties 138,897 0 50,000 0
Other Non - Parking Penalties 4,838 0 2,000 0
Parking Infraction Penalties 196,933 185,000 165,000 190,000 2.7%
DWI Penalties - (Criminal) 26,419 10,000 10,000 5,000 -50.0%
Municipal Court DWI Penalties 17,708 30,000 40,000 ' 45,000 50.0%
Other Criminal /Traffic Misdemeanors 86,685 40,000 15,000
Municipal Court Criminal Traffic 103,537. 125,000 145,000 150,000 20.0%
Municipal Court non- Traffic Misdemeanors 85,148 108,000 115,000 125,000 15.7%
Other Non - Traffic Misdemeanors 27,401 7,000
District Court Recoupments 161,343 75,000 85,000 25,000 - 66.7%
Municipal Court Recoupments 31,849 50,000 95,000 100,000 100.0%
Dog Citations 1,401 1,500 1,500 1,500 0.0%
Total Fines and Forfeitures $1,216,958 $1,084,500 $1,185,500 $1,156,500 6.6%
MISCELLANEOUS REVENUE
Income From Investments $862,464 $675,000 $740,000 $775,000 14.8%
Interest on Sales Tax 43,261 42,000 43,500 43,500 3.6%
Fire DepartmentProperty
Lease /Rental 0 5,000 -587 5,000 0.0%
Parking Permits 1,168 1,000 600 600 -40.0%
Public Telephone Compensation 934 1,500 500 500 -66.7%
Property Rental 300 300 300 300 0.0%
DARE Contributions 414 1,700 1,806 0
Planning Contributions 4,500
Contributions City Pension 2,049 2,000 2,100 2,100 5.0%
Unclaimed Monies 4,868 5,000 5,000 5,000 0.0%
Sale of Salvage . -411
Recycling 383 250 - 100.0%
Other Miscellaneous Revenue 22,897 8,000 25,000 20,000 150.0%
Total Miscellaneous Revenue $942,827 $741,750 $818,219 $852,000 14.9%
NON - REVENUES
Residual Equity Transfer $170,000
Sale of Fixed Assets
Capital Lease Financing 75,000
Right of Way Vacations 360 '
Damage Reimbursements - Police 2,073 2,800 2,000 2,000 - 28.6%
Operating Transfers In 191,000 110,000 110,000 110,000
Total Non - Revenues 193,433 112,800 357,000 112,000 -0.7%
TOTAL REVENUE $30,336,089 $30,481,524 $31,110,022 $31,521,014 3.4%
BEGINNING UNENCUMBERED
BALANCE $3,712,464 $4,049,281 $4,667,622 $3,771,737 -6.9%
TOTAL RESOURCES $34,048,553 $34,530,805 $35,777,644 $35,292,751 2.2%
NOTICE OF PUBLIC.HEARING
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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
1999.
Said public hearing will be held Monday, November 3, 1998 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.
John R. Hanson
Director of Finance & Budget
Please publish October 23, 1998.
Charge to Account 10952
Legal /BD
Agenda Ad Val 6
10/7/98
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of 11/3/98
ITEM TITLE: Public Hearing and Consideration of Legislation pertaining to Ad
Valorem Taxes to be collected for the Fiscal 1999 Year.
SUBMITTED BY: Dick Zais, City Manager
John Hanson, Director of Fin " & Budget
Cindy Epperson, Accounting �,, ager
Ray Paolella, City Attorney / %/
CONTACT PERSON/TELEPHONE: Dick Zais / 575 -6040
John Hanson / 575 -6070
• Ray Paolella / 575 -6030
Cindy Epperson / 576 -6644
SUMMARY EXPLANATION:
Background
As a result of the passage of Referendum 47, it is necessary to take several administrative
and legal steps to establish the property tax levy. Your package includes three (3) separate
ordinances. Ordinance A, B, and C are management's recommendation for the property
levy for 1999.
Ordinance purposes are:
Ordinance A identifies Council's intent to authorize an increase in the tax levy over 1998
levels. This ordinance requires a simple majority to pass. It is required by RCW 84.55.120.
This is legally necessary to increase the '99 tax levy by any amount over 1998 levels.
CONTINUED
Resolution _ Ordinances A. B. C Contract _ Other (Specify) Attachments 1 thru 7
Funding Source _
APPROVED FOR SUBMITTAL: �'� `,\
City Manager
STAFF RECOMMENDATION: Hold Hearing and pass Ordinances
BOARD /COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Legal /BD
Agenda Ad Val 1
10/29/98
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Ordinance B establishes the limit of 6% increase in the tax for the 1999 tax year. This
ordinance requires the majority plus one of the Council members present which constitute'
a quorum. This is required by RCW 84.55.0101. Additionally, another change in the la \
created by Referendum 47 is that property taxes limited to below 6% in the past could be
recouped in future years. Under Referendum 47 this is excluded. If you do not increase for
the full 6% discretionary tax adjustment, it is "lost forever ". This ordinance provides for a
determination of "substantial need" to increase the property tax levy above the "implicit
price deflator" set in Referendum 47.
Ordinance C fixes the tax levy for the City for 1999. 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 1999 City of Yakima recommended property tax levy includes the 6% levy. levies
for voted bond issues, and amounts for annexations and new construction. The budget
currently includes $9,794,107 for the regular levy and $1,300,000 for the voted levy.
Preliminary data received from the Yakima County Assessor shows a combined increase of
approximately $99.8 million or 3.6% in the assessed valuation or operating levy base of the
City of Yakima, as a result of annexations, new construction and re- evaluations. -
At a 106% increase, the City will be limited to a regular increase of $550,616 or 6% above
last year's Operating Levy. Additionally, the levy may be increased $114,714 for property
taxes on new construction and an estimated $54,447 for property taxes on newly annexec
areas. Thus, the increase amounts to a total of $719,777 in the amount of property taxes
the City will be allowed to levy for basic services during the 1999 tax year.
Based on present available estimates for 1999, the recommended operating tax levy for the
City of Yakima would increase property taxes on a $100,000 home by $17.00 per year. If
the implicit price deflator level were chosen, the property tax for a $100,000 home would
decrease ($16.00) next year below the recommended 1999 level. This option would
necessitate a reduction in General Government resources (General Fund, Parks, Streets,
Library) of Fire Pension reserves of approximately ($475,000).
The City has favored State property tax reform, and now with the passage of Referendum
47, continues to endorse the State limitation. The local government tax portion however,
has previously been limited over the years.
As we have stated previously, City management is respectfully recommending that the
property tax levy be set at a 6% increase to maintain and preserve essential and vital
services and resources. It is important to remember the City has already been under a
twofold statutory limit -- the 6% limit and the $3.60 per $1,000 limit since the 1970's. Until
the passage of Referendum 47, the State of Washington has not been limited to similar tax
levy limits and have reaped a windfall as assess value increase has escalated at higher
levels. The impact on the taxpayer of a local 6% levy as noted above to Yakima taxpayers,
is minimal ($17 per year on an average $100,000 home), however, the cumulative impact
on the City Budget is approximately ($475,000) on vital General Government services. The
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confirmation of the levy at 6% is needed to preserve essential City resources, avoid
reduction in municipal service levels.
Already sales tax revenues are starting to flatten, and we are projecting only a 1% growth
from 1998 year -end estimates. Because this major resource is slowing, the Preliminary
Budget has already been reduced by some $400,000 to balance the budget. Indeed, despite
a 10% increase in fixed, mandated and contractual expenses, the General Government
budget for 1999 is projected to increase by only 2.5 %.
If property tax is levied at the implicit price deflator (currently at 0.85 %, plus new
construction and annexations) the additional reduction of $475,000 would be extremely
harmful to basic municipal services of the City. In 1997, Council agreed that "substantial
need" existed for the 106% increase for the 1998 levy. In light of current economic
circumstances, staff believes that the criteria for "substantial need" has again been met,
and recommends levying property tax at the 106% level for 1999.
Further, as reflected, the following Attachments 2 - 6 are excerpts from the Budget
Forecast. Attachments 2 thru 4 reflect how the City uses the property tax, statutory
limitations and Ref. 47 comparisons. Attachments 5 -6 portray per capita comparisons
with other communities in Washington. They reflect that the City of Yakima's property tax
and combined revenue per capita are nearly the lowest of comparable cities. In fact, most
westside cities also impose a local option Business and Occupation Tax, together with
development impact fees as part of their general revenues. The City of Yakima does not.
Accordingly, the City's tax rates are a "good" deal for local homeowners and businesses.
Attachment 7 describes all detailed general fund revenues.
Finally, please note that potentially the levy ordinance is $152,000 higher than the
amountshown in the Preliminary Budget and the Attachments. This procedure allows for
final legally allowed adjustments in State assessed, new construction and annexation
values.
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