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

Topics for Discussion 1 June 10, 2015

» The City of Tukwila is a full service city: June 10, 2015 2

» 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 organization > Goal 5: A positive community identity & June 10, 2015 image 3

» 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 June 10, 2015 identity 4

» General Fund Costs: » Total City Budget $133,515,682 2015 Budget Department (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% June 10, 2015 Debt Service 2.8 5.0% 6 Capital Projects 2.2 3.9% Total General Fund Budget $56.5 100.0%

» General Fund Revenue Sources: 2015 Budget % of Type (in millions) 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% June 10, 2015 Property Sale 2.4 4.2% 7 Total Revenue $56.7 100.0%

» Long-Term Projections (if we change nothing): June 10, 2015 8

» Services Provided by the Kent RFA: June 10, 2015 9

» 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 June 10, 2015 10

» RFA Operating Budget (does not include capital reserve): 2015 Budget % of Department (in millions) 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% June 10, 2015 Support Services 3.5 7.2% 11 Total $48.0 100%

» RFA Revenue Budget: 2015 Budget % of Type (in millions) 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% June 10, 2015 12

Questions for small group discussion: 1. Was there anything that surprised you about the Level of Service presentation? What is one 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 June 10, 2015 to have prior to making your 13 recommendation to Council?

Fire Benefit Charge June 10, 2015 14

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 3 rd 50 cent property tax levy June 10, 2015  Cannot exceed 60% of the annual operating 15 budget

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%) June 10, 2015 16

Formula  Formula shall be reasonably proportioned to the measurable benefits to property  Any other method that reasonably apportions the benefit charges is acceptable. June 10, 2015 17

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 June 10, 2015 18

What is not exempt  School districts  Non-profits  Government entities that do not have a fire department June 10, 2015 19

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) June 10, 2015 = FBC 19

Property Taxes June 10, 2015 21

Taxing Entities Within the City  County  City  State school fund  Port  EMS (Medic One)  Library  Flood control  Metropolitan Park District  Local schools June 10, 2015 22

Location Determines Who You Pay Taxes to: Tukwila School District #2 #1 Renton School District #3 June 10, 2015 City of Tukwila 23

Property Tax Bill for Tukwila Taxpayer June 10, 2015 24

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 June 10, 2015 25

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 June 10, 2015 26

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 June 10, 2015 27

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 June 10, 2015 28

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 June 10, 2015 their first year after the vote. 29

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 June 10, 2015 (Assessed Value / 1,000) / Allowable levy = levy rate or (5,039,932,964 / 1,000) / 14,322,875 = $2.84188 30

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. June 10, 2015 31

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 June 10, 2015 32

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. June 10, 2015 33

Levy Rate for RFA after Annexation RFA maximum levy rate $1.00000 Assessed value would increase because their borders would be expanded. 2015 RFA assessed value = $16,539,495,569 June 10, 2015 2015 City assessed value = $5,039,932,964 34