Mayor and Council

   For the meeting on:

  March 18, 2013
   Department:   Finance
   Responsible staff:  Stacey Webster, Budget and Finance Manager
  phone: (240) 314-8407

Introduction of Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year 2014

Staff recommends that the Mayor and Council introduce the Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year (FY) 2014.

The attached ordinance is provided for introduction purposes. As in prior years, this ordinance may undergo changes prior to adoption in May. This ordinance includes proposed real and personal property tax rates, as well as appropriated amounts by fund, for the FY 2014 operating and capital improvements program (CIP) budgets.

The introduction of this ordinance does not constitute approval of the budget or proposed rates.

General Fund Tax Rates and Tax Credits
The Mayor and Council establish the tax rates each year in order to finance General Fund activities. For FY 2014, the City’s real property tax rate is proposed to remain unchanged at $0.292, and the personal property tax rate is proposed to remain unchanged at $0.805 for every $100 of assessed value. In FY 2014, total property taxes are budgeted to raise $36.0 million, or approximately 53 percent of the City’s General Fund budget.

The estimated FY 2014 property tax revenue includes the State administered Homeowners' Property Tax credit. This program provides real property tax credits to low- and moderate-income residents for property taxes on their principal residence. The City expanded this program in FY 2013 to allow households with gross incomes up to $91,000 per year and a household net worth of less than $200,000 (not including the value of the home and qualified retirement savings) to qualify for tax relief on the first $495,000 of their home's assessed value. For low-income households, the credit could be several hundred dollars, with a maximum credit of the total City tax due on the first $495,000 of assessed value. To provide extra assistance to seniors, this program also includes an additional senior credit equal to an additional 25 percent credit for seniors 70 years or older who are primary homeowners. The total estimated value of this credit is $400,000.

Town Center Parking District Tax Rate
In order to support the debt service costs of the three City-owned garages in Town Square, the Town Center Parking District was formed in 2007. The Parking District is a special taxing district that levies a real property tax on the commercial properties within the Town Square boundaries. The Parking District Tax rate for FY 2014 is proposed to remain unchanged at $0.33 per $100 of assessed value. This tax is in addition to the $0.292 rate on all real property within the City. This tax will provide approximately $167,200 towards funding the Parking District in FY 2014.

Mayor and Council History

Meeting Date
Agenda Item
December 10, 2012 FY 2014 Budget Preview - PART I
February 11, 2013 FY 2014 Budget Preview - PART II

In addition to the budget previews, the Mayor and Council directed staff to prepare several finance worksessions that began in October 2012. These worksessions were intended to provide information for the development of the FY 2014 budget.

Meeting Date
Agenda Item
October 15, 2012 State of the FY 2014 General Fund Budget
City Employee Compensation
November 5, 2012 Capital Improvements Program (CIP)
November 19, 2012 Biennial Budgeting
December 3, 2012 Reducing the City Budget, What it Means to Cut Costs
December 17, 2012 City Contracting
January 7, 2013 Costs and Revenues Associated with New Development

Public Notification and Engagement
All information related to the budget previews and the FY 2014 proposed operating and CIP budgets can be found on the City's website.

The FY 2014 budget public record will be open until May 13, 2013. Three general budget public hearings are scheduled for April 1, April 15, and April 29, 2013. In addition to the public hearings, residents can submit written comments about the budget directly to the Mayor and Council through a link on the City's website or through the City Clerk's Office.

Fiscal Impact
The attached budget ordinance sets the FY 2014 tax rates and the operating and CIP budgets for each fund. The proposed FY 2014 operating budget appropriates $112.0 million across all all funds. The proposed CIP budget appropriates a total of $67.5 million across all funds. As in past years, the budget amounts and/or tax rates may be adjusted between the proposed and adopted budgets.

Next Steps

Meeting Date
Agenda Item
April 1, 2013 Public Hearing #1
April 8, 2013 Mayor and Council Worksession #1, Constant Yield Tax Rate Public Hearing
April 15, 2013 Public Hearing #2, Mayor and Council Worksession #2
April 29, 2013 Public Hearing #3, Mayor and Council Worksession #3
May 6, 2013 Mayor and Council Worksession #4 - Final Direction
May 20, 2013 Budget Adoption

Attachment A - Ordinance

Department Head:

Gavin Cohen, Chief Financial Officer
Approved on: 03/07/2013

City Manager:

Approved on: 03/13/2013