HomeMy WebLinkAbout(0003) IR 21-10614 - Budget and Tax Notice RequirementsINFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 21-10614
To the Mayor and Members of the City Council August 3, 2021
pRTEir.t4 Page 1 of 2
a SUBJECT: BUDGET AND TAX NOTICE REQUIREMENTS
r rn
1ev3
This informal report will provide an overview of the statutory requirements the city must comply with when
issuing public notices, holding public hearings, considering budgets and setting tax rates during the Fiscal
Year 2022 budget and associated ad valorem tax rate adoption process.
Statutory Requirements
The statutory requirements for the budget and tax rate process are found in:
State Law
Tax Code Chapter 26 - Assessment — specific requirements for truth -in -taxation (TNT)
Governs Adoption of Property Tax Rate
0 one public hearing requirement
o notice at least five days before hearing
o must vote within seven days of public hearing or re -notice and hold another hearing
o approval by 60% of Councilmembers (6 members) required via record vote
Local Government Code Chapter 102 — Municipal Budget
0 one public hearing requirement
o notice between thirty and ten days prior to hearing
City Charter
• Chapter X. The Budget and Financial Procedure Relating Thereto (since the 1924 adoption)
o City Manager must propose recommended budget on or before August 15th
o Budget public hearing — one public notice and public hearing requirement
o Cannot vote on budget at the same meeting as budget hearing
o Appropriations ordinance - two publication requirements following adoption
The notice for the tax hearing is at least 5 days but the notice for the budget hearing is at least 10 days prior.
Notices must be published in the official newspaper prior to the public hearings, and posted on the City's
web page and cable channel continuously until votes are held. Where a notice is required under state law,
the law generally dictates exactly what information the notice must contain and often requires the City follow
form notices published by the State Comptroller's office.
Although only a single hearing each is required for the budget and tax rate, additional public hearings are
scheduled to provide further opportunities for public comment. The official budget hearing, which meets all
state and local legal requirements, is scheduled for September 14. The official tax revenue/rate hearing is
scheduled for September 21. It is anticipated that the City Council will act on the proposed budget and tax
revenue/rate on September 21.
Process
Once the City Manager's recommend budget has been drafted, the next step in the TNT process is to
calculate the no -new -revenue and voter -approval tax rates. The no -new -revenue rate looks at just those
properties that are taxable in both the current year and the upcoming year and determines the tax rate that
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 21-10614
To the Mayor and Members of the City Council August 3, 2021
pRTEir4 Page 2 of 2
a SUBJECT: BUDGET AND TAX NOTICE REQUIREMENTS
r rn
1ev3
is needed to generate the same amount of revenue in both years based on those properties. The voter -
approval tax rate is the tax rate that would produce maintenance and operations property tax revenue and
is normally 3.5% above the current year from properties taxable in both years. However, the City was
declared a disaster area and that triggers an increase in the voter approval rate from 3.5% to 8% above the
current year from properties taxable in both years. On August 10, 2021 staff will provide the City Council
with an Informal Report outlining the no -new -revenue and voter -approval tax rates.
The tax rate consists of two components which must be identified and approved separately. The
components are the maintenance and operations (M&O), and interest and sinking (I&S) rate.
If the City's proposed tax rate exceeds the no -new -revenue tax rate but not the voter -approval rate, the
following process is required:
1. Publication of a "Notice of Public Hearings on Tax Revenue Increase," which would occur no
later than September 16, 2021; and
2. The City Council will hold an official public hearing on the tax rate/revenue, which would take
place on September 21, 2021;
3. The City Council will vote on the tax rate/revenues on September 21, 2021 and must be
approved by at least 60% of the Council members; and
4. The City Council will ratify the increased tax revenues through a resolution on September 21,
2021
If the City's proposed tax rate exceeds the voter -approval rate, the process is expedited because of the
requirement for an election and therefore the budget and tax rate must be approved by August 17, 2021.
In accordance with the City Charter, the caption and penalty provision of the tax rate ordinance would need
to be published twice following adoption.
More information may be found on the comptroller's website: httl)s://coml)troller.texas.gov/taxes/property-
tax/truth-in-taxation/
If you have any questions please contact Mark McAvoy, Director of Planning and Data Analytics, at
(817) 392-6222.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS