Topics for Discussion 1 June 10, 2015 The City of Tukwila is a - - PowerPoint PPT Presentation

Topics for Discussion

June 10, 2015

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» The City of Tukwila is a full service city:

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» What guides our budget process:

> Goal 1: A community of inviting neighborhoods & vibrant business district > Goal 2: A solid foundation for all Tukwila residents > Goal 3: A diverse and regionally competitive economy > Goal 4: A high-performing & effective

• rganization

> Goal 5: A positive community identity & image

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» Priorities for the 2015-2016 biennial budget

Tukwila International Boulevard community transformation Community livability Create community partnerships to implement City- wide plans and visions Develop/implement comprehensive economic development plan Continue to create a more effective organization Improved communications and community identity

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» General Fund Costs:

» Total City Budget $133,515,682

Department 2015 Budget (in millions) % of Budget Police $16.4 29.0% Fire 11.0 19.5% Public Works 6.7 11.9% Community Development 3.1 5.5% Parks & Recreation 4.1 7.3% Administrative Support 4.3 7.6% Governance 5.9 10.4% Debt Service 2.8 5.0% Capital Projects 2.2 3.9% Total General Fund Budget $56.5 100.0%

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» General Fund Revenue Sources:

Type 2015 Budget (in millions) % of Budget Sales tax $17.0 30.0% Property tax 14.3 25.2% Utility tax 5.8 10.2% Business licenses/RGRL 2.6 4.6% Other taxes 3.2 5.6% Other gov’t agencies 4.7 8.3% Other 6.7 11.8% Property Sale 2.4 4.2% Total Revenue $56.7 100.0%

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» Long-Term Projections (if we change nothing):

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» Services Provided by the Kent RFA:

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» What guides the RFA budget process:

Goal 1: Better serve a changing population Goal 2: Strengthen our use of data and technology Goal 3: Effectively manage our resources and plan for long-term sustainability and resiliency Goal 4: Cultivate an environment of excellence, respect, and fun

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» RFA Operating Budget (does not include capital reserve):

Department 2015 Budget (in millions) % of Budget Administration $2.6 5.4% IT 1.4 2.9% Fleet Management 2.1 4.4% Logistics/Planning 2.2 4.6% Emergency Management 0.8 1.7% Operations 32.0 66.7% Prevention 3.4 7.1% Support Services 3.5 7.2% Total $48.0 100%

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» RFA Revenue Budget:

Type 2015 Budget (in millions) % of Budget Property tax $15.4 31.4% EMS Levy (property tax) 1.3 2.6% Fire Benefit Charge 18.5 37.6% Interlocal agreements 12.7 25.8%

• Misc. contracts

1.3 2.6% Total Revenue $49.2 100%

Questions for small group discussion:

• 1. Was there anything that surprised you about

the Level of Service presentation? What is

• ne thing you remember from the Level of

Service presentation that you think the community should know?

• 2. With what you have heard so far, what are

the pros and cons of annexing to the RFA?

• 3. What additional information would you like

to have prior to making your recommendation to Council?

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Fire Benefit Charge

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Basics of FBC

 Fee, not a tax  Initial imposition of FBC requires 60% voter approval (different for annexations)  Renewing existing FBC requires 60% for RFAs, renew every 6 years  The FBC takes the place of the 3rd 50 cent property tax levy  Cannot exceed 60% of the annual operating budget

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Basics of FBC, continued

 Imposed on improvements to real property  Administered by the RFA, not the County  FBC is added to property tax bills  County charges a fee to collect the funds (currently 1%)

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Formula

 Formula shall be reasonably proportioned to the measurable benefits to property  Any other method that reasonably apportions the benefit charges is acceptable.

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Exceptions, limitations

 Property owned by religious organizations  Property that is subject to a contract for services  Low income, seniors that qualify for limits on property taxes

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What is not exempt

 School districts  Non-profits  Government entities that do not have a fire department

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Existing FBC Formula, to be revised

Square root of total square footage X 18 X Category factor (type of property) X Fire flow factor (0.31245067777) X Response factor (# of firefighters) X Risk factor (if hazards present) X Applicable discount(s) (sprinklers, alarms) = FBC

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Property Taxes

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Taxing Entities Within the City

 County  City  State school fund  Port  EMS (Medic One)  Library  Flood control  Metropolitan Park District  Local schools

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Renton School District Tukwila School District City of Tukwila

Location Determines Who You Pay Taxes to:

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#1 #2 #3

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Property Tax Bill for Tukwila Taxpayer

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Regular Levies

 Taxing districts have regular levy authority  Usually non-voted (lid lifts are exceptions)  Subject to constitutional and statutory levy limits  Exemptions may apply  School districts have no regular levy authority

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Levy Rate Limits

RCWs specify maximum regular levy rates types: Port $0.45 EMS $0.25 - $0.50 State schools $3.60 County $1.80 Road (County) $2.25 Cities $3.10 - $3.825 Library $0.50 Flood control $0.50 MPD $0.75 Fire $0.50 - $1.50

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How the Levy Rate for the City is Calculated:

 Expressed in $1 per $1,000 of assessed value  City property tax levy rate = 1,000 X City property tax revenue/assessed value

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Levy Rate for City - 2015

City rate annexed to fire or library district $3.60000 Firemen’s pension fund + 0.22500 = 3.82500 Less Library actual levy rate

• 0.44747

Maximum levy rate $3.37753 2015 City of Tukwila levy rate $2.84188

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THE 101% LIMIT

Chapter 84.55 RCW (Limitations on regular property taxes) limits regular levies to 101% of their highest allowable regular levy since 1985, plus new

• construction. An entity is allowed the lesser of the

amounts determined by its statutory rate limit and the 101% limit. Voted regular levies are not governed by this limit in their first year after the vote.

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EXAMPLE: Tukwila’s 2015 Levy Limits

101% Limit:

Highest levy since 1985: $14,060,574 x 101% = $14,201,180 New construction assessed value $24,578,735 x Prior year regular rate then divided by 1,000 $2.97799 = $73,195 + Relevy of prior year refunds $48,500 = Allowable levy using the 101% limit $14,322,875 (Assessed Value / 1,000) / Allowable levy = levy rate or (5,039,932,964 / 1,000) / 14,322,875 = $2.84188

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EXAMPLE: Tukwila’s 2015 Levy Limits

Maximum ($3.37753) limit Regular levy AV: $5,039,932,964 x $3.37753 / 1,000= $17,022,525 Allowable 101% levy $14,322,875 The City’s regular levy may not exceed the lesser of the two italicized and bolded amounts. In 2015, the City was limited by the 101% limit rather than the $3.33753 maximum statutory limit.

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Levy Rate for City after Annexation

City rate annexed to fire or library district $3.60000 Firemen’s pension fund + 0.22500 = 3.82500 Less Library actual levy rate

• 0.44747

Less RFA actual levy rate

• 0.94979

Maximum levy rate $2.42774

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EXAMPLE: Tukwila’s 2015 Levy Limits

Maximum ($2.42774) limit Regular levy AV: $5,039,932,964 x $2.42774/ 1,000 = $12,235,647 Allowable 101% levy $14,322,875 The City’s regular levy may not exceed the lesser of the two italicized and bolded amounts. If annexed to the RFA, the maximum levy rate would be $2.42774 rather than the 101% limit.

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Levy Rate for RFA after Annexation

Assessed value would increase because their borders would be expanded. 2015 RFA assessed value = $16,539,495,569 2015 City assessed value = $5,039,932,964

RFA maximum levy rate $1.00000

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