HomeMy WebLinkAboutIR 9920 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9920
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To the Mayor and Members of the City Council August 9, 2016
Page 1 of 2
E SUBJECT: SUBMISSION OF 2016 EFFECTIVE AND ROLLBACK TAX RATES
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This informal report has been prepared to inform the City Council of the 2016 Effective and
Rollback Tax Rates for use in the budget discussions regarding the financial plan for fiscal year
2017. The Effective Tax Rate reflects the rate which would generate the same revenue as the
prior year based solely on property that was taxable for both years. The Rollback Tax Rate
serves as a cap on property tax rates, thus limiting the taxing units' ability to make material
increases over the prior year's rate.
Pursuant to Texas Property Tax Code Section 26.04.c, the Effective Tax Rate =
(Last Year's Levy — Lost Property Levy)
(Current Total Value — New Property Value)
Property tax rates are comprised of two separate rates, Maintenance & Operation (M&O) and
Interest & Sinking (I&S). As its name implies, the M&O rate provides operating revenue for the
General Fund while the I&S rate is receipted into the Debt Service Fund, providing resources to
repay debt obligations.
The 2016 Effective Tax Rate is $0.814481 / $100 assessed valuation
The 2016 Rollback Tax Rate is $0.887108 / $100 assessed valuation
The 2015 Adopted Tax Rate is currently $0.8550 / $100 assessed valuation
If the City Council wants the option to adopt a tax rate that exceeds the effective rate of
$0.814481 per $100 assessed valuation, it would need to adopt a resolution to consider a tax
revenue increase and hold two public hearings on the tax revenue increase.
Staff has previously advised the City Council that it will be recommending adoption of tax rate of
$0.8350 per $100 of assessed valuation in connection with the fiscal year 2017 budget. This
proposed rate is lower than the current actual adopted tax rate of $0.8550 per $100 of assessed
valuation, and, while this is a lower tax rate, it exceeds the effective tax rate. Therefore, a
resolution to consider a tax revenue increase will be presented for the City Council's
consideration at its August 9 meeting. If the resolution is approved, the state-law-mandated
notices will be published and the public hearings scheduled.
If the City Council adopts a total tax rate that exceeds the rollback rate, taxpayers may petition
for a rollback election by gathering signatures from at least seven percent (7%) of the registered
voters shown on the most recent official voter list. If the rollback election succeeds, the City
would be forced to adopt the rollback rate.
This year, the City will not be subject to a rollback election unless it adopts a tax rate higher than
$0.887108 per $100 of assessed valuation.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9920
�5;
To the Mayor and Members of the City Council August 9, 2016
Page 2 of 2
E SUBJECT: SUBMISSION OF 2016 EFFECTIVE AND ROLLBACK TAX RATES
1875
Pursuant to Section 140.010 of the Local Government Code notice of the proposed tax rate will
be published in the newspaper on August 13, 2016, and additional information regarding the
rollback and effective tax rates will be provided on request. The tax rate (M&O and I&S
components combined) is scheduled to be adopted on September 13, 2016.
If you have any questions, please contact Terry Hanson, Assistant Director, Performance and
Budget Department, at (817) 392-7934.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS