Fort Walton Beach Council agenda — 08-02-2007 Special agenda --tentative millage — reading text

aTYOFFORT WALTON BEACH 2, 2007 - 5: 30P.M. City Council Special Meeting Agenda - August City Council Chambers 107 Miracle Strip Parkway, SE Fort Walton Beach, FL 32548 CALL TO ORDER PLEDGE OF ALLEGIANCE ( Mayor) 2007- 08. 1. Consideration of setting the tentative ad valorem millage rate for FY City Manager) ( See Backup). ADJOURN made with respect to any matter at this meeting will Any person who decides to appeal any decision ensure that a verbatim record need a record of the proceedings, and for such purpose may need to the testimony and evidence upon which the of the proceedings is made, which record includes appeal is to be based. (FS286. 0105). with Disabilities Act and will make The City of Fort Walton Beach adheres to the American Please call City Clerk Helen reasonable modifications for access to this meeting upon request. dial the City Hall TDD #850-833- Spencer at 850-833-9509 to make a request. For Hearing Impaired Voice). Requests must be received at least 48 9925 or 1- 800-955-8771 ( TDD) or 1- 800- 955-8770 ( allow the time to provide requested service. hours in advance of the meeting in order to City  CITY COUNCIL SPECIAL MEETING August 2, 2007 Special Meeting Agenda Consideration of setting the tentative Ad Valorem Millage rate for FY 2007- 08 City Manager) SP- 1 Agenda Item Number:  CITY OF FORT WALTON BEACH Memorandum TO: Joyce Shanahan, City Manager FROM: Charlotte Dunworth, Budget & Grants Manager C)) RE: Tentative Ad Valorem Millage Rate for FY 2007- 08 DATE: July 30, 2007 Back~ round Statutory Authoritv Chapter 200 " Determination of Millage" of the Florida Statutes sets a statutory timetable for the calculation and notification to the public of the process to set ad valorem tax millage rates and adopt a budget. The statute identifies the time frames and briefly describes the tasks to be accomplished during those time frames. Determination of Millaqe 1. Day 1 is on or by July 1 - The Property Appraiser certifies the taxable value of real property within the jurisdiction of the taxing authority. 2. Within 35 days ( around August 4) - The City shall advise the Property Appraiser of: a) proposed/ tentative millage rate; b) current year roll- back rate ( the roll- back rate is the tax rate that would raise the same amount of revenue as last year using the increased taxable value); and c) date, time and place of the tentative budget hearing. 3. 55th day ( around August 24) - No later than 55 days after certification of value, the Property Appraiser shall mail out to the City and the property owners a Notice of Proposed Property Taxes ( TRIM Notice). 4. 80th day ( September 3 to 18) - Not earlier than 65 days after certification, but within 80 days of certification of value, the City shall hold a public hearing on the proposed millage rate and tentative budget. 5. 95th day ( September 19 to October 3) - Within 15 days of the tentative budget hearing, the City shall advertise its intent to adopt a final millage and budget. 6. 97/ 100th day - ( September 21 to October 5) - Not less than 2 days or more than 5 days after the day that the advertisement is first published, a public hearing shall be held to adopt a final millage rate and budget. 7. Within 3 days of the second and final budqet hearinq - The resolution or ordinance adopting the final millage rate shall be forwarded to the Property Appraiser and the Tax Collector. 8. The Property Appraiser then notifies the City of the final adjusted tax roll. 9. Within 30 days of the final hearinq - No later than 30 days following the adoption of the millage and budget F. S., ordinances or resolutions, each City shall certify that they have complied with the provision of Chapter 200, Property Tax Administration Program, Florida Department of Revenue. Immediate Property Tax Relief & Reform To lower property tax rates, legislation was passed during Special Session in June that requires counties, to a designated municipalities, and special taxing districts to reduce property tax revenue collections below the roll- back rate based on taxing behavior Taxable Assessed Value percentage Incr over the past five years. School Districts are exempt from this Year Citywide % roll- back. values have experienced double- digit 2007 1,485, 863, 4 67 9. 6% Property 2006 1, 355, 358, 652 23. 3% increases in South Florida since the early 2000' s, but only here in 2005 1, 099, 663, 741 19. 8% Northwest Florida in 2005 and 2006. According to the statutory 2004 917, 979,449 6. 3% reform, a jurisdiction' s level of cuts is determined by a formula that 2003 863,630,650 3. 9% analyzes the jurisdiction' s taxing performance over the past five Based on the Fort 2002 831, 018, 054 years, measured against a statewide average. 3. 7% 2001 801,494, 995 Walton Beach' s compound annual growth 6. 3% rate of 8. 79% from 2000 754, 237, 271 3. 8% 2001 to 2006, the City' s millage ( tax) rate may not exceed 95% of to the required reduction for FY 2007- 08, a cap the roll- back rate according to the legislation. In addition of income growth and new construction) is on futureproperty tax revenues ( based on the rate personal imposed on all taxing authorities by this statutory reform. Further Property Tax Relief & Reform has In addition to property tax reform enacted via a change to the Florida Statutes, the Legislature to replace the current " Save proposed further reform in the form of a Florida Constitutional amendment our Homes" exemption with a " Super Homestead" exemption. Voters will decide in January 2008 if they value increase equal to the prefer the current homestead exemption of $ 25, 000 with an annual property Consumer Price Index or 3% ( whichever is less) or a super homestead exemption with 75% of the first 1 of 4  200, 000 of taxable value exempted and 15% of the next $ 300, 000 in taxable value exempted, but with no protection for annual increases in assessed value. If the new super exemption passes, existing homeowners will have the option of keeping their existing Save our Homes protection or converting to the new super exemption. The super homestead exemption will apply to all new properties and transfers of ownership. Although it is unknown whether the super homestead exemption will pass and how many properties will convert, staff estimates a worst- case scenario loss of $ 796K in ad valorem revenue at a millage rate of 4. 1986. Discussion Staff has received the 2007 Certification of Taxable Value ( form DR- 420) from the Okaloosa County Property Appraiser. The gross taxable property value is $ 1,485, 863, 467, representing an increase of 130, 504, 815 or 9. 6% over the 2006 Final Gross Taxable Property Value of $ 1, 355, 358, 652. The City must notifythe Property Appraiser by August 4th of its calculated roll- back rate, tentative millage rate, and date of the City' s first public hearing for the budget. Roll- Back Rate The roll- backmillage rate is defined as the millage rate that would produce the same amount of ad valorem tax revenue as was levied during the prior year, exclusive of new construction, deletions, and mills, which would generate boundary changes. Staff has calculated the roll- back rate to be 4.4196 revenues of $6, 238, 576 ( at a 95% collection rate) - an increase of 3. 6% or $ 219, 392. Roll- Back Rate less 5% rate Property tax reform passed by the Florida Legislature in June 2007 requires that the City' millage s not exceed 95% of the roll- back rate ( 4. 1986 mills) unless adopted by a vote greater than simple majority of the governing body. A millage rate of 4. 1986 would generate revenues of $ 5, 926, 619 ( at a 95% collection rate) - a net decrease of 1. 5% or $ 92, 565. Ad valorem revenues in the General Fund would decrease 2.4% or $ 125, 752 and ad valorem revenues in the CRA Fund would increase 3.4% of $33, 187. Tentative Millaqe The tentative millage rate is the rate that will be shown on each property owner' s " Notice of Proposed Taxes" ( i.e. TRIM Notice) sent by the Property Appraiser in August. The TRIM Notice advises each property owner of the taxable value of the property ( assessed value less any exemptions), proposed tentative) millage rate and estimated tax for each taxing authority, and when and where each taxing tax rate. The tentative authority will hold public meetings to discuss the budget and set the actual millage millage rate is because once it is set it cannot be increased without the additional expense of important formal re- notification to each taxpayer. The tentative millage rate may be reduced without formal re- notification to each taxpayer. Staff proposes a tentative millage rate of 4. 1986 mills, which is 95% of the roll- back rate.