HomeMy WebLinkAboutIR 9650 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9650
�+'"'1" tn August 5, 2014
To the Mayor and Members of the City Council
Page 1 of 1
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SUBJECT: SUBMISSION OF 2014 EFFECTIVE AND ROLLBACK TAX RATES
This Informal Report is provided to inform the City Council of the 2014 Effective and Rollback Tax
Rates for use in our upcoming fiscal year 2015 budget discussions. 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 2014 Effective Tax Rate is $0.828730 / $100 assessed valuation
The 2014 Rollback Tax Rate is $0.880515 / $100 assessed valuation
The 2013 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
$0.828730 / $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 re-adoption of the
current tax rate of$0.8550 / $100 in connection with the Fiscal Year 2015 budget. Therefore, a
resolution to consider a tax revenue increase will be presented for the City Council's
consideration at its August 12 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
$0.880515 / $100 assessed valuation.
Pursuant to Texas Property Tax Code Section 24.04.e, the Effective Tax Rate and Rollback Tax
Rate will be published in the newspaper by August 9, 2014 or as soon thereafter as practicable.
The tax rate (M&O and I & S components combined) is scheduled to be adopted on September
16, 2014.
If you have any questions, please contact Aaron Bovos, Financial Services Management
Director/CFO, at (817) 392-8517.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS