Title
Adoption of Council Resolution Declaring a Substantial Need for Property Tax
Recommended Action
Council Committee Recommendation:
Not referred to a committee
City Manager Recommendation:
Move to adopt the resolution declaring a substantial need for property tax.
Report
Issue:
Should the Council pass a resolution of substantial need to allow for a 1percent increase in property tax levy for 2016 tax collections?
Staff Contact:
Dean Walz, Fiscal Services Director, Administrative Services Department, 360.753.8465
Presenter(s):
None. Consent calendar item.
Background and Analysis:
An increase in the property tax levy is limited to the lower of 1percent or the rate of inflation as measured by the implicit price deflator (IPD) plus new construction. The IPD affecting 2016 tax assessment is 0.251 percent. To increase the levy beyond the IPD up to 1 percent requires the council to pass a resolution of substantial need with a super majority of the Council present voting in the affirmative.
If the Council desires to not increase to the full 1% maximum increase, but increase the limit to an amount greater than 0.251 percent the resolution would still need to be adopted. Then the Council could direct staff to use a specific amount of increase up to 1% for the tax levy ordinance.
The Council will be presented with an ordinance later on today’s council meeting agenda to set the 2015 levy for 2016 collections. The 2016 preliminary budget is based on a 1 percent increase. The difference between the IPD allowable increase and 1percent increase is $101,523.
Neighborhood/Community Interests (if known):
None.
Options:
1) Approve the resolution.
2) Do not approve the resolution.
Financial Impact:
Would allow for an amount of up to $101,523 in property tax to be assessed, which would exceed the IPD limit of 0.251%.