HomeMy WebLinkAboutIR 10044 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10044
a'"o-T{per To the Mayor and Members of the City Council August 15, 2017
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a Page 1 of 2
SUBJECT: SUBMISSION OF 2017 EFFECTIVE AND ROLLBACK TAX RATES
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This informal report has been prepared to inform the City Council of the 2017 Effective and Rollback
Tax Rates for use in the budget discussions regarding the financial plan for fiscal year 2018. 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 2017 Effective Tax Rate is $0.787766 / $100 assessed valuation
The 2017 Rollback Tax Rate is $0.813082 /$100 assessed valuation
The 2016 Adopted Tax Rate is currently $0.8350 / $100 assessed valuation
If the City Council wants the option to adopt a tax rate that exceeds the effective rate of$0.787766
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 will be recommending adoption of a tax rate of $0.8050 per $100 of assessed valuation in
connection with the fiscal year 2018 budget. This proposed rate is lower than the current actual
adopted tax rate of $0.8350 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 15 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.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
` INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10044
"nTE"�e To the Mayor and Members of the City Council August 15, 2017
r
Page 2 of 2
SUBJECT: SUBMISSION OF 2017 EFFECTIVE AND ROLLBACK TAX RATES
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This year, the City will not be subject to a rollback election unless it adopts a tax rate higher than
$0.813082 per $100 of assessed valuation.
Pursuant to Section 140.010 of the Local Government Code notice of the proposed tax rate will be
published in the newspaper on August 19, 2017, 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 19, 2017.
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