To: Mark R. Hafner, City Manager
From: Aaron Rector, Director of Administrative Services
Subject:
Title
Consider a resolution of the City Council of the City of Keller, Texas, to consider a proposal to adopt a tax rate that will be lower than the no new revenue and voter-approval tax rates; and providing an effective date.
Action Requested:
Consider approval of the proposed resolution to set a maximum tax rate lower than the no new revenue and voter approval tax rates.
Background:
The Fiscal Year 2020-21 proposed budget was prepared based on a total tax rate of $0.3950. The proposed rate is a decrease of $0.0049 from the current rate and is the seventh rate decrease in a row. In addition, the proposed rate is lower than the no new revenue and voter approval tax rates and therefore, public hearings are not required prior to tax rate adoption. Per Senate Bill 2, adopting a rate under the no new revenue and voter-approval rate requites a notice of the tax rate which will be posted in the Star-Telegram by August 28 and adoption of the rate at a public meeting which is scheduled for September 15.
Generally, the no new revenue tax rate is the tax rate that would generate the same total amount of property tax revenue as the prior year, when comparing properties taxed in both years and was called the effective rate in prior years. The FY 2020-21 no new revenue rate is $0.417588. The voter-approval tax rate is defined as the sum of the maximum effective maintenance and operations rate, and the debt service rate and to exceed the rate requires a voter approval and was called the rollback rate in prior years. The voter-approval tax rate is $0.416278.
The proposed rate for FY 2020-21 is $0.3950, which is a decrease of $0.0049 from the current rate of $0.3999. With the proposed rate decrease, the tax rate will have decreased by $0.04719 over seven years. In addition, Council approved an increase of the homestead exemption from 12% to 14%, which is the fifth increase in a row.
Financial Impact:
The proposed rate would create a total levy of $23,582,462 which is an overall levy decrease of $587,953. The General Fund levy would be $19,920,585 which would be an increase of $45,312. The Debt Service Fund levy would be $3,661,877 which would be a decrease of $633,265. With the approval of the resolution, the tax rate can only be adopted at the proposed rate or lower. Any decrease to the tax rate would result in a decrease to the proposed levy.
Citizen Input/Board Review:
Not Applicable.
Legal Review:
Not Applicable.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial
Council Action:
Consider approval of the proposed resolution as presented.