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INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9245
To the Mayor and Members of the City Council May 18, 2010
Page 1 of 4
SUBJECT: FY2011 PROPERTY TAX PRELIMINARY APPRAISAL VALUES
Property taxes are the single largest component of revenue to the City of Fort Worth's General
Fund. In FY2010 property taxes provided 55% of General Fund revenue. These taxes also fund
the Debt Service Fund and Gas Well Funds. The City receives property tax revenue from citizens
living in three counties: Tarrant, Denton and Wise. Each county has an independent appraisal
district, which is responsible for appraising property values, notifying owners of appraised values
and informing the City of the amount of property taxes due. State law requires the appraisal
districts to provide a preliminary tax roll to the City by May 15. Based on these preliminary rolls,
Tarrant County properties make up 98.1% of appraised value, Denton County comprises 1.8%,
th
and Wise County represents 0.1%. Certified rolls will be available on July 27
The total appraised value from the May preliminary tax rolls is $56.9 billion. Of this value, $14.2
billion is exempt from taxation due to exemptions, including the homestead exemption, over 65
and disabled exemption, and freeport inventory exemption. The net taxable value is $42.6 billion.
This value is likely to decrease (shrink) between May and July due to protests from commercial
and residential property owners. Historically, the amount of this shrinkage is 5% of net taxable
value. This yields an adjusted net taxable value of $40.5 billion.
Total Appraised Value $56,894,744,518
Less Exemptions ($14,246,140269)
Net Taxable Value $42,64 �,604,249
Estimated Shrinkage 5% ($2,132,430,212)
Adjusted Taxable Value $40,516,174,037
The appraisal districts sent out over 332,000 notices to property owners. These included new
residential properties totaling $493 million in value and new commercial properties totaling $547
million. The appraised values of commercial and residential properties break down as follows.
Commercial Residential. Mineral/Other Total
Total Appraised Values $28,851,307,494 $24,814,679,378 $3,228,757,646 $56,894,744,518
Net Taxable Value $20,699,901,118 $19,858,165,592 $2,090,537,539 $42,648,604,249
Adjusted Net Taxable Value $19,871,905,073 $19,063,838,968— $1,580,429,995 $40,516,174,037
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS _
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9245
To the Mayor and Members of the City Council May 18, 2010
Page 2 of 4
SUBJECT: FY2011 PROPERTY TAX PRELIMINARY APPRAISAL VALUES
to-IS
These preliminary adjusted taxable values represent slight declines from the July 2009 certified
values used to develop the FY2010 budget. The total certified value is down 3.2%. Commercial
property values are down 1.7% while residential property values declined by 3.9%. Mineral and
other values are up 2.4%.
Commercial Residential Mineral I Other Total
2010 Adjusted Taxable Value $19,871,905,073 $19,063,838,968 $1,580,429,995 $40,516,174,037
July 2009 Certified Taxable Value $20,211,089,791 $19,840,658,123 $1,799,266,784 $41,851,014,698
Net Change ($339,184,718) ($776,819,155) 0218,836,789) ($1,334,840,L6�1
%Change -1.7% -3.9% 2.4% -3.2%
Mineral valuations continued to grow, but at a slower rate than in the past. The following graph
illustrates the trend in mineral valuations. While this growth is beneficial, minerals represent only
3.6% of the total property value within the City. This increase in mineral valuation will yield an
additional $1.9 million in tax revenue.
Mineral Valuation Growth
(OOOS)
$1,600,000
$1,455,939
$1,400,000
$1,200,000 $1,193,583
$1,000,000
$800,000 $728,212
$600,000
$453,613
$400,000 $322,971
$200,000 $139,171
$33,504 $56,684
$0
2003 2004 2005 2006 2007 2008 2009 2010
Year
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9245
To the Mayor and Members of the City Council May 18, 2010
Page 3 of 4
SUBJECT: FY2011 PROPERTY TAX PRELIMINARY APPRAISAL VALUES
107%
Overall, FY2011 will see the first decline in adjusted property tax values after several years of
growth. Eased on the May preliminary values, the adjusted taxable values in July 2010 (for
FY2011) will be lower than the certified adjusted taxable values for the last two years.
Adjusted Net Taxable Values
(OOOs)
$45,000,000 ___- --_--_. -_-- ----- _
$40,866,909 $41,851,015 40,516,174
$40,000,000
$37,626 +20%
$35,000,040
+10°l0
$29,871, f
$30,040,000 to o
14 i
i
$25,000,004
$20,000,000
r f
$15,000,000
$10,000,000
$5,000,000
i
rr a+a
July'05 Jutr'06 July'07 July'08 July'09 May'10
The impact of this decline on General Fund revenues is significant. General Fund revenues from
current property taxes are projected to be $273.4 million. This is approximately a 3.5% decline
compared to the adopted FY2010 budget and our previous forecast from FY2011.
This estimate of property tax revenue represents a starting point for development of the FY2011
budget. It will be included, along with other data, in the Economic Forum to be presented to the
City Council on May 25th. At that time, the Budget Office will present an overview of the current
economic climate, quantify the impact of property tax and other items on the budget and identify
potential gap reduction options. On June 17th, there will be another budget workshop to provide
additional information on FY2011 budget scenarios. The certified tax rolls will be available on
July 27th. A summary of these and other key dates in the budget process are presented in the
following table.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9245
To the Mayor and Members of the City Council May 18, 2010
Page 4 of 4
• SUBJECT: FY2011 PROPERTY TAX PRELIMINARY APPRAISAL VALUES
•
May 25th Economic Forum
• Economic overview
• Quantify impact of preliminary values and other assumptions
• Identify Potential Gap Reduction Options
June 17th Budget Workshop
July 27th Briefing on Certified Appraisal Values
Aug 10th City Manager recommends FY2011 Budget
Aug 13th Council Retreat (tentative)
Aug 10th Public Hearing
Aug 17th Public Hearing
Aug 24th City Council scheduled to adopt FY2011 Budget
If you have any questions, please call Horatio Porter, Budget Officer, at 817.392.2379.
Dale A. Fisseler, P.E.
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS