FY 2020 Proposed Budget Revenue Work Session February 19, 2019 - PowerPoint PPT Presentation

FY 2020 Proposed Budget Revenue Work Session February 19, 2019

Highlights • No change in real estate tax rate of $1.13 • No change in personal property tax rates • $5.00/ $100 of assessed value (vehicle) • $4.75/ $100 of assessed value (business tangible personal property) • No change in other tax rates • Meals tax revenue grew 2.4% above the rate increase during July – December time period 2

Enterprise Funds • Fees = 100% of expenses • No change in sanitary sewer or stormwater rates • Sanitary sewer = $2.28 per 1,000 gallons • Stormwater = $140 per year for average single family house • + 9% change in residential refuse rate • From $373 to $406 per household per year • Market cost increases seen in rebids • Recycling standards changed in China 3

FY 2020 Proposed General Fund Revenue $761.1 M (+$12.6 M or +1.7%) Federal Revenue Other Revenue State Revenue 1.2% 6.4% 6.3% Other Local Taxes 1.6% Communications Sales Tax 1.2% Restaurant Food Residential Real Property 3.2% 34.6% Transient Lodging 1.6% Recordation Tax 0.8% Business License Tax 4.6% Utility Tax 1.6% Sales Tax 3.8% Commercial Property Personal Property 14.7% 7.0% Multi‐Family Rental 4 Property 11.5%

General Fund Revenue FY 2018 FY 2019 FY 2019 FY 2020 $ Chg % Chg Actual Approved Projected Proposed FY20 FY20 Proposed/ Proposed/ FY19 FY19 General Fund Revenue Approved Approved General Property Tax Revenue Real property tax 438.3 447.0 450.2 462.8 15.9 3.6% Personal property tax 49.2 50.8 51.3 53.1 2.3 4.5% Penalties and Interest 2.6 3.3 2.7 2.7 (0.6) ‐17.9% Total general property tax revenue 490.2 501.1 504.3 518.6 17.6 3.5% 5

CY 2019 Real Estate Assessed Values Classification % Change from CY1 8 Residential Single Family + 1.76% Residential Condo + 3.06 Total Residential + 2 .0 4 Commercial Multi-family + 4.09 Commercial Office, Retail & Service + 3.60 Total Com m ercial + 3 .5 8 Non-locally Assessed + 3.92 Total Taxable Property + 2 .7 1 % 6

Real Estate Tax Rates • Alexandria $1.13 residential and commercial • FY 2020 proposed • No change from FY 2019 approved • Arlington $1.006 residential/ $1.131 commercial • FY 2019 approved • Fairfax County $1.151 residential/ $1.276 commercial • FY 2020 proposed • Loudoun County $1.045 residential and commercial • FY 2020 proposed • Prince William County $1.2075 residential and commercial • FY 2020 proposed • Includes countywide fire and pest control levies 7

Impact on the Average Residential Real Estate T ax Bill Average Average Tax Bill Assessed Value CY 2018 $544,601 $6,154 CY 2019 $555,002 $6,272 Difference + $ 1 0 ,4 0 1 + $ 1 1 8 / year + 3 2 cents/ day 8

Real Estate Tax Deferral Expansion • Deferrals Currently Part of Tax Relief Program for Elderly & Disabled: Existing Program Minimum Age Requirement: 65 years old, or permanently and totally disabled Maximum Allowable Net Assets: $430,000 Dwelling: Must be the applicant’s sole dwelling Allowable Gross Income Available Relief Income $40,000 and less 100% Exempt $40,001 - $ 55,000 50% Exempt, Can defer all or part of taxes over 50% $55,001 - $ 72,000 25% Exempt, Can defer all or part of taxes over 25% _____________________________________________________________________________ New FY 2020 Proposal: Additional Stand-alone Deferral Program Maximum Allowable Gross Income Max Allowed Net Assets $72,001 - $100,000 $430,000 Deferral Only , Liability Due and Payable With Interest Upon Death or Transfer. Same age/disability requirements. 9

Tax Deferral Expansion • Circuit breaker to facilitate aging-in-place • Change acreage exemption from 2 acres to 1 acre • Nominal fiscal impact anticipated 10

Delinquent Tax Collection Outsourcing • Outsourcing delinquent collections of Real Estate, Business Personal Property, and unpaid Parking Tickets • No Cost to City. State law allows 20% fee charged to Delinquent Taxpayer • Builds upon successful outsourcing of Delinquent Car Taxes • Finance retains complete program oversight and control • Continued focus on Customer Service. Payments plans available for financial hardship • Helps maximize collection efficiency, enhances collection of delinquent taxes and tickets. • Estimated gain of $341,000 offsets new Discovery efforts associated with Decal Elimination 11

Elimination of Vehicle Tax Decals • · Eliminate annual decal display requirement for vehicle windshield • · Proposed to be effective for 2020 · Maintains local registration fee, $3.8 million in FY 2020 12

Decal Elimination Statewide · 76% of all Virginia localities have already abolished decal display requirement: · 94% of all counties · 87% of all cities · 60% of all towns · Norm throughout is to retain local registration fee as permitted by State law 13

Decal Elimination, NOVA • Only the Cities of Alexandria, Fairfax and Falls Church still require decal display • Loudoun County abolished decal in 2018 • Arlington County planning to abolish decal in 2020 14

Decal Elimination, Customer Service • Improves customer service and streamlines tax process for nearly 140,000 taxpayers each year • Eliminates affixing & scraping decals • Ends nuisance tax of $1.00 for decal transfer (shards of previous decals had to be returned to Finance upon vehicle disposal) • Fewer walk-ins and better telephone call coverage anticipated 15

Decal Elimination, Collections • Decals initially established to ensure collection; no longer an essential need • Localities have many other tools: DMV Holds, State Income Tax Set-Off Debt, Bank Liens, Wage Liens, Boots, Tows, and Referral to Collection Agency • Most taxpayers are honest and comply with law, avoiding penalties and collection hassle • Continued strong collection rates anticipated- the norm in jurisdictions abolishing decals 16

Decal Elimination, Discovery • In lieu of decals, Finance to deploy License Plate Reader (LPR) technology. Automated match to Tax Roll to identify and research exceptions (used in Arlington/ Falls Church) • Adds 2.0 FTE’s, more discovery field work and research • LPR will enhance delinquent tax and parking ticket collections (levy stickers/ boots) • LexisNexis data analytics project boosts taxation of non-registered vehicles with out-of-state plates • Improves capacity of Parking Enforcement Officers by Finance assuming tax enforcement • Revenue neutral: decal expenditure reductions, enhanced discovery, levy stickers, and collection outsourcing anticipated to cover costs, including elimination of “No Decal” citations 17

General Fund Revenue FY 2018 FY 2019 FY 2019 FY 2020 $ Chg % Chg Actual Approved Projected Proposed FY20 FY20 Proposed/ Proposed/ FY19 FY19 General Fund Revenue Approved Approved Other local tax revenue Local sales tax 27.3 27.7 27.7 28.7 1.0 3.6% Utility tax 12.1 11.8 12.0 12.0 0.2 1.7% Business licenses 33.8 34.9 34.9 34.9 ‐ 0.0% Motor vehicle licenses 3.7 3.8 3.8 3.8 0.0 1.2% Recordation 7.4 5.3 6.0 6.0 0.7 13.2% Cigarette 2.8 2.8 2.8 2.8 ‐ 0.0% Transient Lodging 12.9 13.3 12.4 12.4 (0.9) ‐6.6% Restaurant food 18.3 24.2 23.5 24.0 (0.1) ‐0.6% Admissions 0.7 0.7 0.7 0.7 ‐ 0.0% Communications service 9.9 9.9 9.3 9.3 (0.6) ‐6.1% Other miscellaneous 4.7 4.7 4.7 4.8 0.1 1.4% Total other local tax revenues 133.4 139.0 137.8 139.4 0.4 0.3% 18

General Fund Revenue FY 2018 FY 2019 FY 2019 FY 2020 $ Chg % Chg Actual Approved Projected Proposed FY20 FY20 Proposed/ Proposed/ FY19 FY19 General Fund Revenue Approved Approved Non‐tax revenue Licenses, permits, and fees 2.2 2.6 2.6 2.6 0.0 0.1% Fines forfeitures 5.0 5.2 5.2 5.1 (0.1) ‐1.2% Use of money and property 7.3 8.0 10.2 11.1 3.1 38.3% Charges for services 21.3 21.7 21.9 15.6 (6.1) ‐28.1% Intergovernmental revenues (PPTRA ) 23.6 23.6 23.6 23.6 ‐ 0.0% Intergovernmental revenues 33.0 33.4 32.7 33.6 0.2 0.6% Miscellaneous 1.6 1.9 1.9 2.1 0.2 12.0% Total non‐tax revenue 94.1 96.4 98.1 93.7 (2.7) ‐2.8% Other financing sources (uses) Appropriations to/from Fund Balances ‐ ‐ ‐ ‐ ‐ 0.0% Contribution to/Use of Fund Balance ‐ ‐ ‐ ‐ ‐ 0.0% Transfer from special revenue acct. 10.7 11.9 11.9 9.3 (2.6) ‐22.2% Total Transfers In 10.7 11.9 11.9 9.3 (2.6) ‐22.2% Total General Fund Revenues and Other Sources 728.4 748.4 752.0 761.1 12.6 1.7% 19

RPCA Fee Increases City Marina - $42,617 • Pleasure Boat Slip License Fee* : $21,211 • Commercial Docking Fee* : $5,250 • Marina Outdoor Dining Lease* : $1,156 • Tall Ship Providence Docking Fee: $15,000 o The proposed fee is providing a 50% discount on the annual rate consistent with the proposed rental discount for Affiliates/ Partners/ Community Service providers. * The City Marina is a Tier 5 service in the City Council Adopted Resource Allocation and Cost Recovery Policy. 20