To: Mark R. Hafner, City Manager
From: Aaron Rector, Director of Finance
Subject:
Title
Consider an ordinance levying taxes to be assessed on all taxable properties within the city limits of the City of Keller, Texas for the Tax Year 2017 (Fiscal Year 2017-18).
Action Requested:
Approve the ordinance levying taxes to be assessed on all taxable properties within the city limits of the City of Keller for Fiscal Year 2017-18.
Background:
The tax rate proposed in the fiscal year 2017-18 budget is $0.427500/$100 taxable valuation, a reduction of $0.00250 from the current year and is the fourth rate reduction in a row.
The proposed tax rate distribution is summarized (allocated) as follows:
Purpose Rate Percent
Maintenance and operations (M&O) $0.318946 74.6%
Debt service (I&S) 0.1085154 25.4%
Total $0.4275000 100.0%
The proposed 2017-18 budget tax rate exceeds the effective rate of $0.418194. In order to adopt the proposed rate of $0.427500, State law requires the motion to be stated as follows:
"I move that the property tax rate be increased by the adoption of a tax rate of $0.42750/$100 taxable value, which is effectively a 2.2 percent increase in the tax rate."
Additionally, because the proposed rate exceeds the effective rate, Section 3 of the accompanying ordinance is required by State law and must use a larger font than is used throughout the ordinance: “This tax rate will raise more taxes for maintenance and operations than last year’s rate. The maintenance and operations tax rate will effectively be raised by 6.3 percent over the effective maintenance and operations rate and will raise taxes for maintenance and operations on a $100,000 home by approximately $18.81.”
At the August 15, 2017, Regular City Council meeting, City Council approved Resolution No. 3912 calling for two (2) public hearings on a proposal to consider the adoption of a tax rate of $0.427500. Two (2) public hearings on the proposed tax rate were held, on September 5 and September 12, 2017. At each public hearing, the date, time and location of the meeting to adopt the tax rate was announced.
Budget Impact:
The adoption of the tax rate determines the tax levy that is necessary to support the annual budget for the City of Keller.
Financial Considerations:
Adopting the effective rate would result in approximately $450,257 less revenue from property taxes.
A comparison of average residential levy based on the 2017 average residential taxable value of $329,840 is provided below:
Current tax rate of $0.43000 = $1,418
Proposed budget tax rate of $0.42750 = $1,410
Effective tax rate of $0.418194 = $1,379
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 an ordinance levying taxes to be assessed on all taxable properties within the city limits of the City of Keller, Texas for the Tax Year 2017 (Fiscal Year 2017-18).