Fort Walton Beach Council agenda — 06-22-2010 Special-Budget Policy — reading text

and published on the " Notice of Proposed Taxes ". 4. 2 Motion 2 — Set the dates and times of the public hearings for the millage and budget. 4.2. 1 Special Council Meeting, Wednesday, September 8, 2010, 5: 30pm. 4. 2. 2 Special Council Meeting, Wednesday, September 22, 2010, 5: 30pm. Submitted by: Charlotte Dunworth, Budget & Grants Manager Reviewed & Concur: U`"--- \ l. Brandy Wunker, Finance Director Reviewed for Agenda: t®l/ 1- 1?161119 Cpert T. Mearns, City Manager UABudget \Budget 10 -1 I\ Budget Meeting - May \Mtg 6 -22 Millage.doc 3 Special Council, June 22, 2010 OIOZ' ZZ aunr' li:) uno:) jepadS b 41. XVIS A I'IVNOIJLNH LNI LJH I SI HJVd SIHJL  City of Fort Walton Beach FY 2010 -11 BUDGET POLICY MEETING ton Beach to be a leader among cities itstanding quality services to all use of resources.  Millage Rate One Mill = One Dollar per $ 1000 of Taxable Value 4. 1986 mills = $ 4. 1986 per $ 1000 of Taxable Value Examples: 100, 000 taxable value = $ 419. 86 taxes 50, 000 taxable value = $ 209. 93 taxes The purpose of tonight's meeting is to allow Council the opportunity to set the proposed millage rate, if desired. Millage Rate is the statutory term for tax rate. The millage rate is the amount of tax dollars that will be paid per 1000 of taxable value. The taxable value of a property is the assessed value less any exemptions (e.g. senior, homestead). The City' s current millage rate of 4. 1986 equates to about $4.20 per $1000 of taxable value. For example, if your home has a taxable value of $100, 000 the City receives $419.86 per year in tax revenue. Likewise, if your home has a taxable value of $50,000 the City receives $209.93 per year in tax revenue. Some general information on the composition of the City. The city had 9,483 parcels on the 2009 tax roll. Of these parcels, 7% are tax-exempt and 64% have a taxable value of $100K or less. Consequently, 71% of parcels pay $419.86 or less per year in City property taxes. 0$ 0 -$25K 25 -$50K 50 -$75K $ 75 -$100K $ 100 -$125K 125 -$150K 150 -$175K 175 -$200K $ 200 -$300K $ 300 -$400K 400 -$500K 500K -$1 M 1 M+ 662 1, 602 1, 518 1, 349 1, 625 769 445 228 190 331 244 202 198 120  YR N p 1. v 1111 u- rA` IIK 1• it 1. 11• 1. ME 11. 1 11 1: / 1•: IS IIS 1 1 i Prior to FY 2006 Ad Valorem revenue in the General Fund increased 3.8% annually on average, reflecting moderate assessed value increases. This marginal annual revenue growth covered inflationary increases in operating expenses such as fuel, utilities, and office supplies as well as allowed the City to fund new programs such as Online Utility bill pay, Ferry Park fitness trail, Police Department accreditation, and citizen newsletters without necessitating a rise in the millage rate. In FY 2006 Taxable assessed value surpassed the $1 billion mark. During that time, public safety wages were increased, a rapid response vehicle was purchased, and six additional firefighters were hired for the ALS program. In FY 2007 Taxable assessed value increased 23.3 %. The City increased public safety wages, implemented a department - wide police officer take -home vehicle policy, purchased a fire department command vehicle, and updated the tennis center while reducing the millage rate from 4.9700 to 4.6458. (6.6 %) In FY 2008 The Millage rate was lowered for the second year in a row to 4.1986, which is the current millage rate of the City. In FY 2009 and 2010 Taxable value decreased and the millage rate was maintained at 4. 1986, which resulted in the elimination of over 60 positions and reduced hours for 18 positions. FY For FY 2011 Preliminary taxable value is 6.4% less than the prior year. At the current millage rate, this will translate to $246K less tax revenue in the General Fund. Although the City' s estimated revenues for FY 11 are at FY 04 levels, the current millage rate of 4.1986 is 15.5% lower than the rate of 4. 97 in FY 04. In the years when services were increased and the millage rate decreased, interfund transfers from the utilities and sanitation enterprise funds in excess of the cost allocation amount were made to balance the budget. While it is reasonable to expect the enterprise funds to return a portion of their profits to the General Fund, the transfers enabled the city to maintain an artificially low tax rate at the expense of reducing the net asset of the enterprise funds.  Rolled -Back Rate The rolled -back rate is defined as the millage rate that would generate the same ad valorem tax revenue as the prior year, City -Wide. The rolled -back rate is defined as the millage rate that would generate the same ad valorem tax revenue as the prior year, city -wide. (exclusive of new construction, deletions, boundary changes, and CRA dedicated increment.) Because the City' s overall taxable assessed value has decreased, in order for the City to receive the same amount of ad valorem revenue as the previous year, the millage rate would need to be higher —this higher rate is termed the rolled -back rate. The effect of the rolled -back rate on each individual property owner varies depending on their change in taxable value and their exemptions. Based on the preliminary taxable value, staff estimates a millage rate of 4.5489 would generate the same amount of ad valorem tax revenue as the prior year City-Wide. For example, a home that had a taxable value in 2009 of $100,000 may have a taxable value of $93,400 in 2010, given that that single property decreased in an amount equal to the preliminary assessed value received from the Property Appraisers office. If that were the case, that property owner would likely not see an increase in their property taxes at the rolled -back rate. However, they would also not see a decrease, even though their assessed value decreased. If the assessed value of a property increased, that property would see an increase in their tax bill at the rolled -back rate.  Maximum Millage Rate General Fund Variance from Variance from Method of Maximum Ad Valorem Maintaining FY 2009 -10 Adoption Millage Revenue 4. 1986 Mills Revenues n. Majority Vote 5. 2815 5, 072, 963 1, 040, 142 794, 567 4 votes) Two- Thirds Vote 5. 8097 5, 580,307 1, 547,486 1, 301, 911 5 votes) n Unanimous Vote or 10. 0000 n/ a n/ a n/ a Voter Referendum LegislationLegislation enactedenacted inin 20072007 limitslimits thethe maximummaximum millagemillage raterate basedbased onon thethe affirmativeaffirmative votevote ofof thethe governinggoverning body.body. MajorityMajority VoteVote ( ( 44 votes)votes) — — thethe MaximumMaximum millagemillage isis 5.5. 28152815 ( ( preliminarypreliminary estimate)estimate) RolledRolled - - backback raterate calculated calculated usingusing thethe priorprior yearyear taxestaxes thatthat wouldwould havehave beenbeen leviedlevied ifif thethe maximummaximum majoritymajority votevote millagemillage raterate hadhad beenbeen adopted,adopted, adjustedadjusted forfor thethe changechange inin perper capitacapita FloridaFlorida personalpersonal incomeincome ( ( 0.0. 98119811 % % forfor 20102010 - - 11).11). LastLast yearyear CouncilCouncil adoptedadopted aa millagemillage raterate ofof 4.4. 1986,1986, althoughalthough thethe maximum maximum majoritymajority votevote millagemillage raterate waswas 4.4. 8352.8352. TheThe rolledrolled - - backback raterate isis defineddefined asas thethe millagemillage raterate thatthat wouldwould generate generate thethe samesame adad valorem valorem taxtax revenuerevenue asas thethe priorprior year,year, exclusiveexclusive ofof newnew construction,construction, deletions,deletions, boundaryboundary changes,changes, andand CRACRA dedicateddedicated increment.increment. TwoTwo - - ThirdsThirds VoteVote ( ( 55 votes)votes) — — 110% 110% ofof thethe majoritymajority votevote maximummaximum millagemillage